[SMM Analysis] Freight Rates Surge, Making Deals Difficult for Steel Expor ters Affected by the US-Iran conflict, tight energy supply and sharply higher fuel costs, compounded by exchange rate fluctuations, have continuously pushed up China's export offers in recent days. Compared with the beginning of the month (March 6), SMM HRC prices have been raised by $9/mt; galvanizing prices rose by $11/mt; CRC rose by $5/mt; billet rose by $6/mt; and rebar rose by $6/mt. However, looking back at market transaction performance, deals weakened again recently. According to the SMM survey, ocean freight rates surged sharply, with current freight to the Middle East as high as $50-60. Most outside China clients remained on the sidelines; shipowners also refused to commit tonnage while waiting for the market to stabilize. For China exporters, there were offers but no market, making shipments difficult. Meanwhile, market sources said Hadeed, the GCC's only flat steel producer, raised its May hot-rolled coil (HRC) prices, still related to shipping restrictions in the Strait of Hormuz. HRC cargoes previously booked from China and other origins were also being redirected to the west coast, mainly heading to Jeddah Port, bringing high inland transportation costs. As for global steel prices, in India, in addition to rising raw material costs and rupee depreciation, a sudden LNG energy shortage further pushed up production costs, forcing steel mills to maintain a strong willingness to hold prices firm despite the traditional domestic off-season and blocked exports. In the Southeast Asian market, price increases were accepted entirely passively, mainly due to the rigid pass-through of high ocean freight rates by overseas suppliers. Although Southeast Asian buyers hesitated to take orders, they had no choice but to passively accept the increases against the backdrop of persistently high geopolitical logistics costs. At the same time, CIS export offers also rose significantly, benefiting from the intensifying geopolitical conflict in the Middle East and the resulting short-term global supply tightens. In the Middle East market, meanwhile, as war tensions continued to escalate, the closure of the Strait of Hormuz completely disrupted transportation, while freight rates and delivery uncertainty pushed the sheets & plates import markets in the UAE and Saudi Arabia into a complete standstill. Copyright and Intellectual Property Statement: This report is independently created or compiled by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), and SMM legally enjoys complete copyright and related intellectual property rights. The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders. The above rights are strictly protected by relevant laws and regulations of the People's Republic of China, such as the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as applicable international treaties. Without prior written authorization from SMM, no institution or individual may: 1. Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating); 2. Disclose the content of this report to any third party; 3. License or authorize any third party to use the content of this report; 4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses. Data Source Statement: (Except for publicly available information, other data in this report are derived from publicly available information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, brokerage reports, data from the National Bureau of Statistics, customs import and export data, various data published by major associations and institutions, etc.), market exchanges, and comprehensive analysis and reasonable inferences made by the research team based on SMM's internal database models. This information is for reference only and does not constitute decision-making advice. SMM reserves the final interpretation right of the terms in this statement and the right to adjust and modify the content of the statement according to actual circumstances.

[CISA: Safeguard the Overall Interests of the Industry Chain and Jointly Resist "Cut-throat Competition"] In May, some automakers once again significantly reduced the prices of NEV products, spreading panic over a new round of "price wars" throughout the automotive industry. There are no winners in a "price war," and there is certainly no future. We propose: The steel and automotive industries should forge a consensus, strengthen their internal capabilities, enhance self-discipline, and jointly break free from "cut-throat competition." They should leverage technological innovation to drive the healthy and sustainable development of the industry chain and take practical actions to maintain a fair and orderly market order. Only in this way can the automotive and steel industry chains achieve "high-quality supply assurance and mutually beneficial outcomes with efficiency," thereby truly realizing high-quality development, embodying the spirit of "Made in China," and contributing China's strength and wisdom to the healthy development of the global economy!

CISA: Monthly Report on the Operation of Major Steel-Consuming Industries, January-February 2025 From January to February 2025, the construction industry, a major steel-consuming sector, continued to decline, while the manufacturing industry maintained steady growth. Among them, the main indicators of the real estate sector continued to decrease YoY, with the rate of decline narrowing. Infrastructure construction investment and power investment maintained growth. The added value of the machinery industry continued to grow, and the export value of mechanical and electrical products increased. Automobile production achieved rapid growth, with NEV production continuing to surge, while the growth rate of automobile exports declined. The production of the three major white goods in the home appliance industry maintained growth, with the growth rate of home appliance exports narrowing. Container production also maintained growth.

The China Iron and Steel Association (CISA) held an information conference on the 29th. In Q1, the cumulative operating revenue of key statistical member steel enterprises reached 1,436 billion yuan, down 6.61% YoY; operating costs amounted to 1,350.5 billion yuan, down 7.73% YoY; and total profits stood at 21.583 billion yuan, up 1.08 times YoY.

[CISA: Steel inventory of key steel enterprises reached 15.3 million mt in late May] In late May 2025, the steel inventory of key steel enterprises under statistical monitoring was 15.3 million mt, a decrease of 1.05 million mt MoM (down 6.4%), an increase of 2.93 million mt compared to the beginning of the year (up 23.7%), an increase of 10,000 mt compared to the same period of the previous month (up 0.1%), an increase of 730,000 mt compared to the same period of last year (up 5.0%), and a decrease of 320,000 mt compared to the same period of the year before last (down 2.0%).

[CISA: 141 Enterprises Complete Ultra-Low Emission Retrofits Throughout the Entire Process, Involving Crude Steel Capacity of Approximately 591 Million mt] Jiang Wei, Vice President and Secretary General of the China Iron and Steel Association (CISA), stated at an information conference held in Beijing on the 29th that as of April 20, 2025, a total of 189 steel enterprises had completed or partially completed ultra-low emission retrofits, as well as assessment and monitoring. Among them, 141 enterprises had completed ultra-low emission retrofits throughout the entire process, involving crude steel capacity of approximately 591 million mt.

According to China Iron and Steel Association (CISA), the data from the National Bureau of Statistics showed that China's crude steel output in 2022 stood at 1.013 billion mt, down 2.1% on the year.

According to China Iron and Steel Industry Association official Weibo news, on April 26, the CISA held an information conference for the first quarter of 2023 in Beijing to introduce the operation of the steel industry.

On April 16, 2024, the Guangdong-Hong Kong-Macao Greater Bay Area Ferrous Metal Industry Chain Forum took place in Lecong, Guangdong, drawing nearly 300 steel industry representatives from the region.

[CISA: Analysis of Production and Sales of Plate and Strip by Key Statistical Enterprises in April] In April, the production of medium-thickness plate mills among key statistical enterprises continued to rise YoY, while the production of hot continuous rolling mills decreased slightly, and the production of cold continuous rolling mills remained flat. Among the main varieties of plates, shipbuilding plates, steel plates for engineering machinery, and electrical steel plates saw significant YoY increases in production; container plates, pipeline steel plates, boiler and pressure vessel plates, and home appliance plates experienced relatively large YoY declines in production. Product prices all declined MoM. From January to April, the cumulative production of medium-thickness plate mills increased YoY, while the cumulative production of hot continuous rolling mills and cold continuous rolling mills both decreased YoY.