The most-traded HRC contract fluctuated downward today, closing at 3,429 at the end of the session, down 1.04% intraday. HRC spot prices dropped 10-20 yuan/mt today. In terms of supply, some rolling lines resumed production after maintenance this week, and HRC production edged up WoW, but the pressure remained moderate. Demand side, spot transactions were lackluster today. As futures pulled back, demand from futures-spot arbitrage and speculation weakened, with the market dominated by low-price purchases. Cost side, iron ore was in a pattern of strong supply and demand, while coking coal and coke performed on the weaker side, and cost support remained weak. Looking ahead, the supply-demand imbalance in HRC was relatively small, but caution was still needed in the short term .....

On May 18, 2026, iron ore futures trended weaker today. The most-traded contract I2609 closed at 803 yuan/mt, down 1.11% from the previous trading session. Port spot prices were 2-4 yuan higher than the previous day. Traders showed moderate enthusiasm in offering quotes; steel mill purchases were mostly driven by rigid demand; overall spot trading sentiment was lukewarm. Last week, SMM global iron ore shipments totaled 30.922 million mt, up 5.48% WoW. Among them, Australian shipments were basically stable, while Brazil's shipments rebounded significantly. In addition, last week, total iron ore arrivals at Chinese ports reached 25.9288 million mt, up 5% WoW and up 6.28% YoY on a cumulative basis. Iron ore fundamentals continued last week's pattern. Supply side, as mainstream mines accelerated shipments in Q2, there were signs of entering a loosening channel again. However, demand side, blast furnace operating rates remained at relatively high levels, ensuring rigid demand for iron ore. Therefore, iron ore's upside was relatively limited, but price support remained generally solid. On the macro front, coking coal and coke prices fell on futures due to policy shifts, dragging overall ferrous metals prices weaker. However, given that iron ore's own fundamental price support remained relatively firm, ore prices are expected to resume fluctuating at highs after a brief pullback this week. [SMM Steel]

[SMM Coking Coal and Coke Daily Brief] News: Leading coke enterprises initiated a coke price increase of 50-55 yuan/mt, which plans to take effect at 00:00 on May 20. In terms of supply, coke enterprises maintained moderate production enthusiasm, with smooth shipments and low coke inventory levels. Demand side, steel mill hot metal production this week continued to fluctuate at highs, supporting strong rigid demand for coke, and some steel mills with low inventory still had restocking needs. In summary, coke has entered the fourth round of price increases, but futures recently fluctuated downward, suppressing bullish sentiment. In the short term, the coke market is expected to hold up well, remaining generally stable with slight rise.

SMM May 18 Update: Metals market: Last Friday's overnight session saw a broad sell-off across both domestic and overseas metals markets, with most declining over 1%. LME tin led the decline at 4.03%, LME copper fell 3.15%, LME aluminum and SHFE tin dropped over 2% (LME aluminum -2.36%, SHFE tin -2.84%). LME lead, LME zinc, LME nickel, SHFE copper, and SHFE nickel all fell over 1% (LME lead -1.39%, LME zinc -1.35%, LME nickel -1.9%, SHFE copper -1.29%, SHFE nickel -1.3%). SHFE lead and SHFE zinc fell less than 1% (SHFE lead -0.6%, SHFE zinc -0.44%). The alumina front-month contract fell 1.19%, and the foundry aluminum front-month contract fell 0.99%. Last Friday's overnight session saw broad declines in ferrous metals. Stainless steel fell 0.94%, and iron ore fell 0.8%. Hot-rolled coil and rebar dropped over 0.6% (hot-rolled coil -0.63%, rebar -0.62%). For coking coal and coke, coking coal fell 0.49% and coke fell 1.32%. Last Friday's overnight session for precious metals: COMEX gold fell 3.02% overnight, down 3.96% on the week; COMEX silver plunged 10.59%, down 5.65% on the week. In China, SHFE gold fell 1.13%, down 3.37% on the week; SHFE silver fell 6.79%, down 3.26% on the week. This was mainly driven by rising US Treasury yields and the strengthening of the US dollar with no resolution in sight, while the US-Iran conflict intensified inflation concerns, further reinforcing market expectations of interest rate hikes. As of 8:24 AM on May 16, last Friday's overnight closing prices: Macro Front Wang Yi briefed the media on the China-US summit and the consensus reached. Wang Yi stated that the two heads of state interacted for nearly 9 hours and agreed that building a "China-US Constructive Strategic Stability Relationship" was the most important political consensus. At the invitation of President Trump, President Xi Jinping will pay a state visit to the US this autumn. The economic and trade teams of both countries reached overall balanced and positive outcomes, including continuing to implement all consensus from previous negotiations, agreeing to establish a Trade Council and an Investment Council, addressing each other's concerns on agricultural product market access, and promoting the expansion of two-way trade under a reciprocal tariff reduction framework. China: The Ministry of Foreign Affairs provided consolidated responses on China-US economic and trade issues including semiconductors, rare earths, Boeing, and oil purchases. On May 15, Ministry of Foreign Affairs spokesperson Guo Jiakun hosted a regular press conference and provided consolidated responses on China-US economic and trade issues. Regarding rare earth supply, China is committed to maintaining the stability of global supply chains. Regarding purchases of US oil and Boeing aircraft, China expressed willingness to jointly safeguard energy security and supply chain stability, emphasizing the mutually beneficial nature of China-US economic and trade relations. Qiushi Journal published an important article by General Secretary Xi Jinping titled "Making the Real Economy Stronger, Better, and Bigger." The article pointed out that manufacturing is the foundation of the real economy, and high-quality development of manufacturing should be given a more prominent position, with unwavering commitment to building a manufacturing powerhouse. It called for implementing industrial foundation re-engineering projects and major technical equipment breakthrough projects, supporting the development of specialized, refined, distinctive, and innovative enterprises, and promoting high-end, intelligent, and green development of manufacturing. It also called for promoting the integrated cluster development of strategic emerging industries and building a batch of new growth engines in areas such as next-generation information technology, artificial intelligence, biotechnology, new energy, new materials, high-end equipment, and green environmental protection. US dollar: As of last Friday's overnight close, the US dollar index rose 0.41% to 99.28, up 1.45% on the week. Rising energy prices and prolonged shipping disruptions intensified inflationary pressures, pushing up market expectations that the US Fed would raise interest rates this year. US interest rate futures prices fell sharply on Friday, reflecting growing conviction among bond market investors that elevated inflation would force the US Fed to raise interest rates later this year or in early 2027. According to the CME FedWatch tool, the market priced in approximately a 60% probability of a 25-basis-point rate hike by the Federal Open Market Committee (FOMC) meeting next January, with a 50% probability of a rate hike in December. US April retail sales grew further, but part of the increase may have stemmed from rising inflation, as the Iran conflict pushed up energy and other commodity prices. Data released Thursday showed April retail sales rose 0.5%, in line with market expectations, while the March increase was revised down to 1.6%. The Iran conflict is driving up inflation; US Energy Information Administration data showed gasoline prices rose 12.3% in April. Despite surging oil prices, consumer spending had not yet noticeably shifted away from other areas due to larger tax refund amounts this year. IRS data showed that as of April 25, the average refund amount increased by $323 compared to the same period in 2025. However, this support is fading. Economists at PNC Financial Services Group stated that based on internal data analysis, "consumers are spending their tax refunds faster than last year, especially among lower-income households," adding that "the amount of refund money being used to pay off credit card and other debts is also declining." (Jin10 Data APP) The Fed Board of Governors said in a statement on Friday that it had appointed Jerome Powell as chair pro tempore until his successor Kevin Warsh is officially sworn in. The US Fed stated: "This interim step of appointing the current chair as chair pro tempore is consistent with the practice followed during previous chair transitions." In response, Fed Governors Bowman and Milan stated that they did not support the interim appointment. On May 15, Powell's term as Fed Chairman expired. (Wallstreetcn) Analysts at BofA Global Research: If strong global economic growth prevents the US Fed from cutting interest rates, emerging markets could perform well. However, under scenarios of asymmetric growth (favoring the US) or a global stagflation shock, emerging markets would be more vulnerable. On the currency front, even though the election trigger point is still months away, commodity outlook and monetary policy should continue to provide support for the Brazilian real. (Wallstreetcn) Data: This week, China will release data including April total retail sales of consumer goods YoY, April industrial value added of enterprises above designated size YoY, the one-year Loan Prime Rate as of May 20, and April Swift RMB share in global payments. The US will release data including initial jobless claims for the week ending May 16, weekly ADP employment change for the week ending May 2, April pending home sales index MoM, April annualized housing starts, April building permits, May Philadelphia Fed Manufacturing Index, continuing jobless claims for the week ending May 9, May S&P Global Manufacturing PMI preliminary, May S&P Global Services PMI preliminary, May University of Michigan Consumer Sentiment Index final, May NAHB Housing Market Index, May one-year inflation expectations final, and April Conference Board Leading Index MoM. The UK will release data including March three-month ILO unemployment rate, April unemployment rate, April claimant count, April CPI MoM, April Retail Price Index MoM, May Manufacturing PMI preliminary, May Services PMI preliminary, May CBI Industrial Orders balance, May GfK Consumer Confidence Index, April public sector net borrowing, and April seasonally adjusted retail sales MoM. Germany will release data including April PPI MoM, May Manufacturing PMI preliminary, June GfK Consumer Confidence Index, Q1 final non-seasonally adjusted GDP YoY, and May IFO Business Climate Index. The eurozone will release data including March seasonally adjusted trade balance, April CPI YoY final, April CPI MoM final, May Manufacturing PMI preliminary, March seasonally adjusted current account, and May Consumer Confidence Index preliminary. Canada will release data including April CPI MoM and March retail sales MoM. Japan's April core CPI YoY, France's May Manufacturing PMI preliminary, and Australia's April seasonally adjusted unemployment rate will also be released. In addition, in China, the National Bureau of Statistics (NBS) will release the monthly report on residential property prices in 70 large and medium-sized cities, the State Council Information Office will hold a press conference on the national economic performance, and a new round of domestic refined oil price adjustment window will open. At 2:00 AM on May 21, the US Fed will release the minutes of its monetary policy meeting. The Reserve Bank of Australia will release the minutes of its May monetary policy meeting. ECB Chief Economist Lane and Fed Governor Waller will speak at an ECB research conference. 2026 FOMC voter and Philadelphia Fed President Paulsen will deliver a speech. Crude oil: As of last Friday's overnight close, the US-Iran standoff over Strait of Hormuz passage remained unresolved, and both benchmarks rose. WTI gained 4.44% and Brent gained 3.55%. On the week, WTI rose 10.73% and Brent rose 8.08%. As the Iran conflict cut off energy supplies from the Persian Gulf, US refiners are ramping up fuel production to fill supply gaps in gasoline, diesel, and jet fuel. Analysts said this rapid growth trend is expected to keep many refineries operating at effective maximum capacity for at least the remainder of 2026. Reduced spare crude oil supply in Europe and other regions, combined with the difficulty of restoring post-conflict infrastructure in the Middle East in the short term, is pushing up crude oil refining margins. Analysts said this rapid growth trend is expected to keep many refineries operating at effective maximum capacity for at least the remainder of 2026. Data from the US Energy Information Administration showed that the so-called "capacity utilization rate" has climbed for three consecutive weeks and is now approaching 92%. In recent weeks, gasoline production hit a nine-month high, while jet fuel production reached its highest level since the summer of 2024. (Jin10 Data APP) US Energy Secretary Wright said at an event in Sabine Pass, Texas on Friday that the US will replenish every barrel of crude oil released from the Strategic Petroleum Reserve (SPR). He said: "We are releasing oil now, and for every barrel released, we will put back at least 1.2 barrels into the reserve. Ultimately, we will make the reserve larger than when we started." (Jin10 Data APP) According to US media reports, the Trump administration plans to streamline the permitting process for oil projects within the National Petroleum Reserve-Alaska to boost crude oil production in the US Arctic region. The Interior Department's move aims to establish a new permitting framework for the construction and operation of oil production facilities and related infrastructure. Under the plan, eligible projects could receive analysis and authorization more quickly, potentially within just 30 days. This initiative could benefit companies holding leases in the reserve, such as ConocoPhillips, Santos, and Repsol, and accelerate government review of projects like ConocoPhillips' Willow project, which had drawn strong opposition from climate activists. During the Iran conflict, with approximately 20% of global supply trapped in the Persian Gulf, the Trump administration has stepped up calls for US oil companies to increase production. (Jin10 Data APP) US import and export prices surged in April, posting the largest increases in over four years, driven by oil market pressures related to the Iran conflict, further signaling rising inflation in the world's largest economy. Data released Thursday by the Bureau of Labor Statistics showed the import price index rose 1.9% MoM, the largest increase since March 2022, with petroleum costs surging 19%. Export prices rose 3.3% MoM, also the largest increase in over four years. (Wallstreetcn)

SMM Cold-Rolled Production Schedule: May Steel Mill Cold-Rolled Production Schedule Up 2%, Daily Average Production Schedule Down 1.4% According to the latest SMM tracking data, the total planned cold-rolled commercial steel volume from 31 mainstream cold-rolled sheet and coil steel mills was 4.2123 million mt this month, up 78,500 mt MoM from actual cold-rolled commercial steel production, an increase of 1.9%. On a daily average basis, May had one more day than April. The daily average cold-rolled commercial steel production schedule in May was 135,900 mt, down 1.4% MoM from the daily average actual cold-rolled commercial steel production in the previous month. SMM HRC Production Schedule: May HRC Production Schedule Up 0.3% MoM, Daily Average Down 3% According to the latest SMM tracking data, the total planned HRC commercial steel volume from 39 mainstream steel mills was 13.3564 million mt this month, up 37,400 mt MoM from actual HRC commercial steel production, an increase of 0.3%. On a daily average basis, May had one more day than April. The daily average HRC commercial steel production schedule in May was 430,900 mt, down 3.0% MoM from April's actual daily average production. Currently, steel mill profits and order conditions were favorable, and production enthusiasm was high. The overall May production schedule was basically flat MoM compared to April's actual production. May had fewer days than April, and on a daily average basis, steel mills' HRC production schedule declined MoM. Summary: Total production schedule for hot-rolled commercial steel at steel mills in May was basically flat MoM. However, since May has more days than April, the daily average production schedule decreased MoM, and supply pressure was slightly lower than previous expectations. Demand side, sheets & plates demand is expected to weaken marginally in mid-to-late May. Hot-rolled coil inventory is expected to continue destocking over the next 2–3 weeks, and the accumulation of supply-demand imbalance before month-end in May will be limited. Other aspects, the ex-China energy premium is unlikely to ease in the short term, and hot metal production continues at elevated levels. HRC prices are expected to fluctuate at highs before late May. During this period, the pullback in coking coal prices driven by expectations of easing Middle East conflicts and the periodic weakening in export order-taking for hot-rolled coils are expected to put prices under pressure temporarily, though the downside is limited.

[SMM Coking Coal and Coke Daily Brief] Supply side, coking enterprises maintained relatively active operations, and coke supply edged up. Coking enterprises saw smooth shipments, with their own coke inventory remaining at relatively low levels. Demand side, current steel mill profits were moderate, and steel mills maintained high production enthusiasm. Some steel mills with lower coke inventory urged deliveries, but most steel mills' coke inventory had returned to reasonable levels, with purchasing as needed being the dominant approach. In summary, the coke supply-demand structure maintained a tight balance, and the coke market may hold up well with a generally stable with slight rise trend next week.