This week, ferrous metals were in the doldrums. The main logic during the week remained weakening cost support. On Tuesday, Iran proposed charging transit fees for the Strait of Hormuz, while Trump made conciliatory remarks, saying that “even if the Strait of Hormuz remained largely closed, he would still be willing to end military action against Iran.” Market expectations for tighter crude oil supply weakened, and declines in the energy sector dragged down the coal sector, weakening the cost-side logic. During the week, inventories of the five major steel products continued to decline, but apparent demand remained at a low level for the same period in previous years, providing limited fundamental-driven momentum to futures. In the spot market, purchasing interest was average, mainly focused on restocking at low prices. Spot prices were relatively firm, and the spot-futures price spread widened somewhat......

[SMM Daily Brief Review of Coking Coal and Coke] In terms of supply, coking coal costs for coke producers declined somewhat, and with the first round of coke price increases now fully implemented, losses at coke producers narrowed significantly, boosting production enthusiasm. Coke supply increased steadily, while downstream demand remained moderate, shipments were smooth, and producers' own inventory continued to decline. Demand side, steel mill blast furnaces gradually resumed production, and daily average hot metal production continued to increase, driving up rigid demand for coke. However, steel mills have recently seen good coke arrivals, with most mills' coke inventory at mid-range levels and overall procurement sentiment remaining average. In summary, coke market fundamentals have shifted toward looser supply and demand, and coupled with weaker recent cost support for coke, the coke market may remain temporarily stable in the short term, with further price increases facing greater difficulty.

[SMM Daily Brief Review of Coking Coal and Coke] In terms of supply, coke producers maintained relatively good operating rates, and coke supply increased steadily. Downstream rigid demand for coke still existed, coke producers' shipments were relatively smooth, and there was no obvious inventory pressure for the time being. Demand side, steel mills' daily average hot metal output increased, driving up rigid demand for coke. However, futures declined recently, and end-use demand remained weak, weakening market sentiment and reducing steel mills' purchase willingness. In summary, after the coke price hike, market sentiment weakened, and the coke market may remain temporarily stable in the short term.

[SMM Daily Brief Review of Coking Coal and Coke] In terms of supply, most coke producers maintained relatively stable operating rates, and downstream buyers showed moderate enthusiasm for coke procurement, with smooth shipments from coke producers and no obvious inventory pressure for the time being. On the demand side, steel mills were currently in the stage of blast furnace production resumptions, increasing rigid demand for coke, but no significant improvement was seen in end-use demand for finished steel products, market sentiment weakened, and steel mills' purchase willingness declined somewhat. In summary, the first round of coke price increases was officially implemented, but market sentiment pulled back recently, most steel mills had moderate coke inventories, the coke supply-demand structure gradually shifted toward balance, and the coke market may remain generally stable with slight rise in the short term.

[SMM Operating Rate of Steel Mills Using Externally Purchased Billets] According to the SMM survey, as of March 31, the operating rate of steel mills using externally purchased billets mainly producing construction steel stood at 27.39%, up 27.39 percentage points MoM from February and up 5.25 percentage points YoY. National construction steel prices fluctuated downward in March. Rebar prices reached 3,167 yuan/mt on March 23, the highest price of the month, and 3,131 yuan/mt on March 4, the lowest price of the month. After the Lantern Festival, downstream construction sites gradually resumed work, market demand gradually improved, and end-users' just-in-time procurement increased slightly. Cost side, affected by multiple macro factors, the coal market as a whole showed a pattern of being more likely to rise than fall. At some coal mines in producing areas, production release was hindered by factors such as working face replacements, leading to a slight contraction in supply, while downstream procurement demand remained robust. Auction transaction premiums were obvious, further supporting stronger coal prices. As cost pressure was passed on, coke enterprises showed a strong willingness to hold prices firm, and expectations for a new round of coke price increases to be implemented heated up, which will likely be gradually realized in the near term. Raw material prices are expected to fluctuate upward in the short term, and cost support for steel remained in place. Supply side, blast furnace steel mills currently maintained a stable production pace, with production remaining relatively steady; EAF steel mills resumed production in an orderly manner as planned, and the capacity utilization rate continued to rebound. As of March 24, the operating rate of 50 electric furnace steel mills nationwide mainly producing construction steel was 40.42%, up 1.78% from the previous period. Billet-rolling mills also gradually resumed work after the Lantern Festival, and the operating rate of steel mills using externally purchased billets was 27.39% this month, up 27.39% MoM, driving a rapid increase in overall market supply. Demand side, downstream construction sites were gradually resuming work, and market demand increased somewhat. However, dragged down by end-user steel consumption volumes and tight cash flow at end-user enterprises, the market remained cautious about the outlook. Downstream construction sites and traders mainly purchased as needed, and the strength of demand recovery was weaker than in the same period in previous years. Overall, after the Lantern Festival, both supply and demand increased, and the supply-demand imbalance was not yet prominent. As temperatures gradually recover and terminal construction conditions improve, the rebar supply-demand pattern is expected to improve mildly, and inventory is likely to continue declining. However, constrained by funding conditions, the room for incremental demand should not be viewed overly optimistically. Therefore, the increase in the operating rate of billet-processing enterprises in April is expected to be limited, and the room for overall supply growth is relatively small.

[SMM Daily Brief Review of Coking Coal and Coke] In terms of supply, coking coal costs charged into coke ovens at coking enterprises remained high. Coupled with solid demand for coke from steel mills and increased procurement volumes, coke inventory at coking enterprises continued to decline. On the demand side, blast furnace production resumptions at steel mills continued to advance, and hot metal production kept rebounding, strengthening rigid demand for coke. In summary, the supply-demand structure of coke remained tight. In the short term, the coke market may continue to hold up well, and the first round of coke price increases is expected to be implemented soon.

SMM News, March 31 According to SMM data, the average tax-inclusive full cost of domestic aluminum industry in March 2026 rose 0.5% MoM and fell 5.7% YoY, mainly due to a slight rebound in alumina raw material costs during the period. In March, Middle East production cuts pushed up aluminum prices in and outside China. The SMM A00 monthly average spot price (February 26-March 25) rose 2.9% MoM, and aluminum profit margins expanded to 8,316 yuan/mt. Based on monthly average price calculations, 100% of China’s operating aluminum capacity was profitable in March. From the cost breakdown side: Alumina raw materials : According to SMM data, the monthly average of the SMM alumina index in March was 2,685 yuan/mt (January 26-February 25), up 2.4% MoM. During the month, total operating alumina capacity was basically stable, but the Middle East geopolitical conflict raised ocean freight rates for alumina and bauxite, and domestic alumina costs are expected to move higher. Futures prices drove spot prices higher, lifting the monthly average alumina price. Entering April, the upward momentum in spot alumina prices at month-end March appeared slightly insufficient. Some new projects are expected to come online in April or ramp up operating capacity, but as the base price at the beginning of the month was already at a high level, alumina raw material costs in April are expected to post a slight increase. Auxiliary materials market : In March, both prebaked anode and fluoride salt prices pulled back, lowering aluminum auxiliary material costs. Entering April, the Middle East geopolitical conflict raised international oil prices, and higher costs continued to push up petroleum coke prices, which in turn supported higher prebaked anode prices. The April prebaked anode tender price at a large aluminum plant in Shandong rose 300 yuan/mt MoM; for aluminum fluoride, prices are also expected to rise significantly in April due to higher raw material costs. Overall, auxiliary material costs are expected to increase significantly in April. Electricity prices : Electricity prices were generally stable in March. Entering April, power prices are expected to remain broadly stable, and aluminum power costs are expected to hold steady. Overall, in March 2026, SMM expected the weighted average tax-inclusive full cost of dometstic aluminum industry to rise slightly; in April, it was expected to increase significantly MoM, with the average at around 16,150-16,550 yuan/mt.

[SMM Daily Brief Review of Coking Coal and Coke] Supply side, coke producers' shipments were smooth, and coke inventory continued to decline, but recently the cost of coal charged into furnaces at coke producers continued to rise, dampening the production enthusiasm of some coke producers. Demand side, current hot metal production at steel mills continued to increase, boosting rigid demand for coke. In summary, coke fundamentals showed a tight trend, and coupled with strengthening cost support for coke, the coke market may hold up well in the short term, with the first round of coke price increases this week likely to be implemented.

This week, ferrous metals retreated after a rapid rise. At the beginning of the week, the market said that Asia had shifted to coal-fired power generation due to a natural gas supply deficit, while Indonesia would increase coal production and impose export taxes. The rise in international coal prices was transmitted to China, and coking coal and coke led the gains in ferrous metals; mid-week, the Middle East situation remained volatile, and the U.S. and Iran held differing attitudes toward war, with ferrous metals consolidating at high levels; the pullback in the second half of the week was also mainly due to the weakening of the cost-side logic, as market rumors said long-term iron ore contract negotiations had been completed, expectations for tightening iron ore supply declined, and raw materials turned into the main driver of the pullback. In the spot market, speculative trading and end-user purchase sentiment improved in the first half of the week, while rigid demand remained dominant in the second half, and the spot-futures price spread widened somewhat......

[SMM Daily Brief Review of Coking Coal and Coke] News side, some steel mills are expected to raise wet-quenched coke prices by 50 yuan/mt and coke dry quenching prices by 55 yuan/mt, effective from 00:00 on April 1, 2026. In terms of supply, coke producers currently saw good shipments, and coke inventory remained at a relatively low level. Meanwhile, coking costs increased significantly, strengthening coke producers' willingness to increase prices. Demand side, steel sales improved, and steel mills were in the stage of resuming work and production, with hot metal production trending upward, boosting their willingness to procure coke. Overall, the first round of coke price increases may be implemented next week, and the coke market is likely to hold up well in the short term.