[SMM Coking Coal and Coke Daily Brief Review] In terms of supply, coking costs increased and losses widened somewhat. At present, coke producers were barely maintaining normal operating rates, while coke production remained temporarily stable. Meanwhile, downstream demand for coke increased, and coke producers' shipments improved somewhat. On the demand side, steel mills were in an active phase of resuming production, while finished steel prices fluctuated upward and steel mill profitability improved somewhat, boosting production enthusiasm and increasing demand for coke. In summary, the fundamentals of coke supply and demand developed in a positive direction, and the coke market may remain generally stable with slight rise in the short term.

As of March 17, the operating rate of 50 electric-furnace steel mills nationwide mainly producing construction materials was 38.64%, up 3.26% WoW; the capacity utilization rate was 39.87%, up 10.53% WoW; and daily average production of construction materials was 88,800 mt, up 23,500 mt WoW.

March planned rebar production was 7.9565 million mt, an increase of 923,500 mt from February’s actual production, up 13.13%. March planned wire rod production was 3.1036 million mt, an increase of 466,300 mt from February’s actual production, up 17.68%. In March, the long steel export schedule for sample steel mills was 712,000 mt, an increase of 137,000 mt MoM; of which the steel billet export schedule was 270,000 mt, down 23,000 mt MoM.

This week, ferrous metals were in the doldrums. There were no significant macro disturbances during the week. The pullback in the US dollar index led to a rebound in nonferrous metals and the A-share market, but ferrous metals did not follow the trend noticeably. Instead, pressure from bears weighed on finished steel prices. On the spot market, most markets have already entered a holiday shutdown. Spot prices remained basically stable, while market transactions contracted sharply...

According to the SMM survey, the impact from maintenance on construction steel decreased this week (6.14-6.20). There were more production resumptions and maintenance activities on construction steel rolling lines at steel mills last week and this week, resulting in an impact from maintenance on construction steel of 1.2615 million mt, a decrease of 57,500 mt WoW.

This week, prices of 304 stainless steel scrap off-cuts in east China pulled back to 9,450-9,550 yuan/mt, while those in Foshan pulled back to 9,300-9,600 yuan/mt. Currently, when calculated by raw material, the production cost of stainless steel produced entirely from stainless steel scrap is approximately 13,239.47 yuan/mt, while that produced entirely from high-grade NPI is approximately 13,270.41 yuan/mt. This week, a steel mill in south China lowered its purchase price for stainless steel scrap. As of June 13, the tax-inclusive purchase price for 304 molten stainless steel reached 8,963 yuan/mt. This week, stainless steel finished product prices continued to decline. High-grade NPI prices ended their previous upward trend and pulled back, while stainless steel scrap prices followed suit and weakened amid market pessimism. Currently, stainless steel has entered the traditional consumption off-season, with weak end-use demand leading to a continuous accumulation of steel mill inventories, making it difficult to sustain previous price-limiting strategies. However, after the cancellation of price limits, the situation of losses for enterprises has further intensified, and expectations for production cuts at steel mills have risen. Despite the fact that the supply of stainless steel scrap is not abundant, the combination of weakening demand and cost pressure on steel mills has exerted downward pressure on stainless steel scrap prices. Although the economic advantage of stainless steel scrap over high-grade NPI has re-emerged, its advantage is relatively limited due to the simultaneous weakening of high-grade NPI prices. Overall, it is expected that stainless steel scrap prices will continue to remain in the doldrums in the short term.

[Insufficient Increase in Terminal Production Orders, Price of Non-oriented Electrical Steel Still Has Room to Decline Next Week] This week, the price of cold-rolled non-oriented electrical steel in Shanghai declined slightly, with overall market transactions remaining weak. This week, the ferrous metals series futures market fluctuated, and the spot price of HRC showed relatively small fluctuations. However, the long-term outlook for finished steel prices is downward, which still has a negative impact on the non-oriented electrical steel market. On the fundamental side, the supply of non-oriented electrical steel resources remains loose, especially among private mills, where sales competition is fierce and prices lack support. State-owned enterprises face relatively small pressure in supplying non-oriented electrical steel resources, with overall inventory at a low level and prices for these resources remaining firm. Additionally, the market is in an off-season for demand, with order growth in downstream automotive and home appliance industries gradually narrowing, limiting the increase in demand for non-oriented electrical steel. Looking ahead, the supply of non-oriented electrical steel is expected to tighten somewhat, with some manufacturers voluntarily cutting production, improving the loose supply situation. However, demand release remains insufficient, with only a moderate increase in downstream terminal production orders. The market is generally cautious and waiting to see, and it is expected that there will still be some room for price declines in Shanghai's non-oriented electrical steel next week.

This week, prices of 304 stainless steel scrap off-cuts in east China pulled back to 9,600-9,700 yuan/mt, while prices of 304 stainless steel scrap off-cuts in Foshan also pulled back to 9,350-9,650 yuan/mt. Currently, when calculated by raw material, the production cost of stainless steel produced entirely from stainless steel scrap is approximately 13,417.11 yuan/mt, while the production cost of stainless steel produced entirely from high-grade NPI is approximately 13,413.27 yuan/mt. This week, a steel mill in south China did not update its purchase price for stainless steel scrap. This week marks the first week after the Dragon Boat Festival. As the stainless steel market officially enters the traditional consumption off-season in June, finished product consumption remains sluggish, with prices continuing to decline, and the price of stainless steel scrap has also followed suit. Recently, news of production cuts at stainless steel mills has been circulating, and market expectations for demand for stainless steel scrap have weakened, leading to an increasingly cautious sentiment among stainless steel scrap traders. Despite the increase in high-grade NPI prices during the week, which has somewhat alleviated the economic disadvantage of stainless steel scrap, it still lacks cost advantages. Influenced by multiple factors such as weak stainless steel consumption, production cuts at steel mills, and insufficient economic efficiency, the stainless steel scrap market is expected to continue its weak performance in the short term.

According to the SMM survey, as of June 3, the operating rate of 50 electric furnace steel mills across China, which mainly produce building materials, stood at 38.42%, down 0.72% WoW from the previous period. The capacity utilisation rate was 39.68%, up 0.42% WoW. The daily average production of building materials was 88,400 mt, an increase of 900 mt WoW.

This week, ferrous metals series experienced greater volatility, with prices falling at the beginning of the week and slightly recovering towards the end of the week. However, the overall decline for the week was significant. On the macro front, as the week drew to a close, the US Court of International Trade blocked the Trump administration's reciprocal tariff and fentanyl tariff. But by Friday, news emerged that the ruling of the US Court of International Trade had been suspended. In fact, even if the ruling were implemented, tariffs on specific industries such as automobiles and auto parts, steel, and aluminum would not cease, and the actual impact on steel would be limited. Therefore, it is not advisable to be overly optimistic...