This week, ferrous metals exhibited a pattern of initial weakness followed by strength. At the beginning of the week, after the U.S.-Iran peace talks failed to reach an agreement, the U.S. military announced it would impose a blockade on all maritime traffic in and out of Iranian ports, pushing international oil prices higher once again. Mid-week, disturbances from iron ore long-term contract negotiations intensified, with market rumors suggesting that restrictions on certain previously limited products had been partially lifted. Subsequently, news emerged of an unexpected shutdown at an Australian refinery, raising market concerns that a diesel supply deficit could trigger mine shutdowns, which in turn would lead to short-term supply tightening. Coupled with rising expectations of a second round of coke price increases, ferrous metals successfully rallied in the latter half of the week...

According to market reports, European stainless mills are facing mounting cost pressure from both geopolitics and raw materials. Concerns linked to the US-Iran conflict are adding uncertainty to energy and input costs, while 304 scrap has climbed to €1,400/t delivered across most EU countries this month. The continued rise in costs is becoming a key support factor for higher stainless steel prices in Europe.

According to market reports, European stainless flat steel prices continue to rise sharply, but overall market sentiment remains cautious. Feedback from the Tube & Wire trade show in Düsseldorf suggests that geopolitical uncertainty, subdued downstream activity, and a mixed outlook for end-users are still weighing on confidence. Although demand has improved from the weak levels seen in 2025, real end-user activity remains disappointing.

[SMM Steel] POSCO emphasized the need for stronger international cooperation to accelerate steel decarbonization at the World Steel Association meeting. The company highlighted rising energy costs and weak demand as key challenges, while stressing fair market valuation for low-emission steel. POSCO also engaged with global partners on carbon reduction technologies, investment, and supply chain stability, as it continues to push its decarbonization roadmap.

[SMM Steel] UNESID welcomed the new European Union steel trade mechanism set to take effect on July 1, 2026, replacing current safeguards. The system reduces tariff-free quotas by ~47% to 18.3 million mt/year and raises out-of-quota tariffs to 50%, while allowing limited quota carry-over in the first year.

This week, stainless steel production costs showed a strengthening upward trend, while spot prices rose even more significantly. The cost-price inversion at stainless steel mills was repaired, and profits gradually recovered. Taking 304 cold-rolled products as an example, based on current raw material prices, the full cost profit margin reached 1.79% this week; calculated using inventory raw material costs, the profit margin was 1.99%. On the nickel-based raw material cost side, high-grade NPI prices showed a strengthening upward trend this week. Affected by the revision of Indonesia's nickel ore HMP, the market expected nickel ore costs to rise. Combined with the continued strengthening of SHFE nickel and SS futures, bullish expectations in the high-grade NPI market were strong. After downstream stainless steel mill profits recovered, their acceptance of high-priced raw materials improved, driving high-grade NPI quotes to stop falling and rebound. As of this Friday, mainstream high-grade NPI with 10-12% grade rose 10 yuan per nickel unit, closing at 1,090 yuan/nickel unit. Stainless steel scrap market side, stainless steel scrap prices rose sharply this week, driven by nickel ore cost increases and futures market linkage. The revision of nickel ore pricing pushed up cost expectations, and combined with the simultaneous rise in high-grade NPI, raw material linkage drove prices higher. Although the cost advantage of stainless steel scrap narrowed slightly, it remained attractive to steel enterprises, and market trading activity improved. Despite delayed payment issues dragging on trading pace, the market remained generally strong under futures-spot resonance and demand support, and was expected to consolidate at highs in the short term. As of this Friday, mainstream 304 off-cuts prices in Shanghai rose 200 yuan/mt, with the latest quote at approximately 10,350 yuan/mt. On the chrome-based raw material cost side, high-carbon ferrochrome prices continued their downward trend this week. Although stainless steel prices strengthened somewhat, procurement transactions in the high-carbon ferrochrome market remained sluggish recently. Earlier maintenance and production cut plans were insufficiently implemented, and current supply remained at a relatively high level. Meanwhile, recent declines in chrome ore and coke prices further weakened cost support, and rising nickel-based raw material costs also exerted some downward pressure on ferrochrome prices. As of this Friday, mainstream high-carbon ferrochrome prices in Inner Mongolia fell 75 yuan/mt (50% metal content) WoW, closing at 8,475 yuan/mt (50% metal content).