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......

This week, stainless steel spot prices fell slightly more than production costs, further worsening the inversion between stainless steel mill prices and costs. Taking 304 cold-rolled products as an example, based on raw material prices on the day, the full cost profit margin was -1.19% this week; calculated based on raw material inventory costs, the margin was -0.55%. Nickel-series raw material costs, high-grade NPI prices remained in the doldrums this week. Although nickel ore prices are currently holding firm and NPI traders are broadly bullish, SHFE nickel futures have been weak recently, while downstream stainless steel prices have struggled to rise. Stainless steel mills themselves are under heavy cost pressure and have shown low acceptance of high-priced raw materials, resulting in sparse market transactions recently; affected by this, high-grade NPI traders have faced considerable transaction pressure, and the price center edged lower slightly. As of this Friday, high-grade NPI with a grade of 10-12% fell by 2 yuan per nickel unit to 1,081.5 yuan/nickel unit. Stainless steel scrap market, stainless steel scrap prices were stable this week, and the decline in finished stainless steel prices did not transmit to the steel scrap market, while prices of substitute furnace charge also remained stable. Tightness in tax invoices eased, the economic advantage of steel scrap became more evident, and high stainless steel mill production schedules drove higher consumption, lifting market transactions and easing inventory pressure. However, finished product prices struggled to rise, limiting upside room for steel scrap prices, which are expected to remain stable in the short term. As of this Friday, the price of 304 off-cuts in Shanghai rose by 100 yuan/mt, with the latest quote at around 10,150 yuan/mt. Chrome-series raw material costs, high-carbon ferrochrome prices dropped back slightly this week. Although some ferrochrome producers recently reported maintenance and production cuts, and stainless steel production schedules for April remained high, leaving retail spot supply in the ferrochrome market relatively tight, stainless steel mills had built relatively ample ferrochrome raw material inventories earlier. Meanwhile, high port inventories of chrome ore recently caused some loosening in chrome ore spot prices. In addition, ferrochrome capacity has already reached a high level, the rainy season in south China is approaching, and ferrochrome producers outside China are resuming production. With ferrochrome producers lacking confidence in the outlook, ferrochrome prices still faced some downward pressure. As of this Friday, high-carbon ferrochrome prices in Inner Mongolia fell 25 yuan/mt (50% metal content) WoW to 8,625 yuan/mt (50% metal content).

This week, 304 stainless steel scrap off-cuts prices in east China held steady at 10,100-10,200 yuan/mt; prices for the same grade of stainless steel scrap off-cuts in Foshan dropped back slightly, with the price range at 9,700-10,000 yuan/mt. Raw material production cost side, the current cost of producing stainless steel entirely from stainless steel scrap was about 14,218.64 yuan/mt, while the production cost of using only high-grade NPI was 14,745.57 yuan/mt. This week, stainless steel scrap prices remained largely stable, mainly as supportive and constraining factors were intertwined, with no obvious one-way trend. Stainless steel finished product prices edged down under pressure from weaker SS futures, and market sentiment was somewhat disturbed, but this did not directly transmit to the stainless steel scrap market, where prices remained stable. Substitute furnace charge performed steadily, with both high-grade NPI and high-carbon ferrochrome prices largely stable this week and showing no obvious fluctuations in change, so their overall impact in driving stainless steel scrap prices was limited and failed to provide effective support or drag. Factors supporting the stable performance of stainless steel scrap prices were more prominent. The recent tightness in stainless steel scrap tax invoices eased somewhat, improving the market trading environment. Meanwhile, the economic advantage of stainless steel scrap over high-grade NPI remained in place. In addition, stainless steel mills' April production schedules stayed high, and steel mills increased their use of stainless steel scrap with economic advantages, lifting recent market trading activity, while previously accumulated inventory pressure also eased to some extent, providing strong support for stable prices. However, constraining factors also remained. Stainless steel finished product prices currently faced difficulty moving higher, and under this transmission effect, stainless steel scrap prices still faced some pressure to rise, making any obvious upward trend difficult to emerge. Overall, the stainless steel scrap market this week showed a pattern of "strong support, clear constraints, and stable prices." Supportive and constraining factors counterbalanced each other, and stainless steel scrap prices were expected to remain stable in the short term.

Inter-product price spreads are a segment of the rebar spread system characterized by complex logic and abundant trading opportunities. Unlike the spot-futures price spread, which reflects the spot-futures structure, and calendar spreads, which reflect near- and far-term expectations, the core of inter-product price spreads lies in macroeconomic structural adjustment and profit distribution across the industry chain. From the perspective of the industry chain, inter-product price spreads for long steel products are mainly concentrated in the following four areas:

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......

As of March 24, the operating rate of 50 electric-furnace steel mills nationwide mainly producing construction materials was 40.42%, up 1.78% WoW from the previous period; the capacity utilization rate was 41.75%, up 1.88% WoW from the previous period; and daily average production of construction materials was 93,000 mt, up 4,200 mt WoW.

This week, stainless steel spot prices and production costs rose in tandem, though the losses between steel mill costs and prices narrowed slightly. Taking 304 cold-rolled products as an example, based on raw material prices on the day, the full cost profit margin was -0.7% this week; calculated based on raw material inventory costs, it reached 1.15%. Nickel raw material costs, high-grade NPI prices remained in the doldrums this week. Although news disruptions from Indonesia persisted during the week and nickel ore prices held up well, with most NPI producers suffering losses, stainless steel prices currently struggled to rise, while steel mills themselves faced significant cost pressure and showed low acceptance of high-priced raw materials. Although the NPI market had the intention to probe higher, weak overall transactions constrained it, and actual price increases faced resistance. As of this Friday, high-grade NPI with a grade of 10-12% fell by 0.5 yuan/nickel unit to 1,083.5 yuan/nickel unit. Stainless steel scrap market, stainless steel scrap prices rose slightly this week, mainly boosted by macro news, stronger futures, and rising finished steel prices. The US-Iran conflict and news of Indonesia taxing nickel products stimulated stronger SS futures, pushing stainless steel spot prices higher and in turn boosting stainless steel scrap prices. Although stainless steel scrap had a clear economic advantage, tight tax invoices caused by reverse invoicing and high inventory capped its upside room, so it only posted a slight increase. Overall, the stainless steel scrap market saw a mild upward trend this week, with short-term support still in place but insufficient upward momentum. If the tax invoice issue remains unresolved, prices are expected to continue fluctuating. As of this Friday, the price of 304 off-cuts in Shanghai rose by 100 yuan/mt to about 10,150 yuan/mt. Chrome raw material costs, high-carbon ferrochrome prices remained stable this week. Although overseas market chrome ore futures prices still had room to be raised, China port chrome ore inventory remained high. In addition, ferrochrome producers recently showed weak willingness to purchase chrome ore, and China chrome ore prices pulled back, weakening cost support for ferrochrome. Meanwhile, current ferrochrome retail prices were already significantly higher than steel mill tender prices, and further gains in high-carbon ferrochrome prices faced resistance. As of this Friday, high-carbon ferrochrome prices in Inner Mongolia were unchanged from last week at 8,650 yuan/mt (50% metal content).

This week, 304 stainless steel scrap off-cuts prices in east China strengthened to 10,100-10,200 yuan/mt; stainless steel scrap off-cuts of the same specification in Foshan also rose, with prices at 9,800-10,100 yuan/mt. Raw material cost side, the current cost of producing stainless steel entirely from stainless steel scrap was about 14,218.64 yuan/mt, while the cost of production using only high-grade NPI was 14,686.86 yuan/mt. This week, stainless steel scrap prices rose slightly, mainly driven by macro news, firm futures, and gains in finished product prices. The US-Iran geopolitical conflict was unlikely to end in the short term, while news related to Indonesia's export tax and windfall tax on nickel products continued to ferment. These two bullish factors jointly kept SS futures holding up well. At the same time, supported by higher guidance prices from stainless steel mills, spot stainless steel finished product prices also strengthened and moved higher, directly transmitting to the stainless steel scrap market and pushing its prices up slightly. Performance on the substitute raw material side diverged. Affected by stainless steel mills' continued efforts to push for lower prices, high-grade NPI generally remained stable this week, with no obvious change; high-carbon ferrochrome, however, was dragged down by a sharp buildup in chrome ore inventory, making its price rally difficult to sustain, and its overall support for stainless steel scrap was limited. Although stainless steel scrap still maintained a clear economic advantage over high-grade NPI, providing some support for its prices, the constraining factors were also prominent. Under the impact of the reverse invoicing policy, the shortage of tax invoices had not been alleviated, and current stainless steel scrap inventory remained high. These two factors jointly capped the upside room for stainless steel scrap prices, resulting in only a slight increase rather than a sustained upward trend. Overall, the stainless steel scrap market showed a mild upward pattern this week, characterized by "futures support, finished product-driven gains, and evident constraints." Although short-term supportive factors remained in place, upward momentum was insufficient due to the drag from tax invoice and inventory issues. If the tax invoice problem remains difficult to resolve effectively in the short term, stainless steel scrap prices are expected to continue fluctuating within a range.

This week, ferrous metals fluctuated at highs, with raw material ore and coking products outperforming steel. Against the backdrop of the escalating conflict in the Middle East, ore and coking products held up well, supported by higher shipping costs and transmission from coal and coke as energy substitutes. In the second half of the week, supply and demand data for hot-rolled coil and rebar were released. The increase in rebar inventory slowed markedly; however, hot-rolled coil demand was lower than the same period last year, and the pace of post-holiday recovery was relatively slow, leaving steel as a whole with limited upward momentum, while futures retreated after rapid rise. In the spot market, trading in the Chinese market was average this week.....

This week, prices of 304 stainless steel scrap off-cuts in east China strengthened to 10,000-10,100 yuan/mt; prices of stainless steel scrap off-cuts of the same specification in Foshan also rose, with the price range at 9,600-9,900 yuan/mt. In terms of raw material production costs, the current cost of producing stainless steel entirely from stainless steel scrap was about 14,098.03 yuan/mt, while the cost of production using only high-grade NPI was 14,786.98 yuan/mt. This week, stainless steel scrap prices fell back, mainly driven by macro sentiment disruptions, weak futures, and pressure on both supply and demand. Escalating geopolitical conflicts, coupled with hawkish remarks from the US Fed, dragged SS futures into the doldrums overall, with the bearish impact directly transmitted to the spot market. Stainless steel finished product prices also pulled back across the board, and market pessimism gradually spread. Prices of substitute raw materials also pulled back, while stainless steel mills showed a strong inclination to push for lower prices. NPI traders turned weaker in sentiment and sold at low prices, and the high-grade NPI market also softened. In addition, Tsingshan's April tender price for high-carbon ferrochrome was set low, not only below previous market expectations but also lower than current retail quotations, limiting room for ferrochrome prices to rise and eliminating the support from substitute raw materials for stainless steel scrap. Currently, inventory at stainless steel scrap yards remained relatively high. Coupled with tight tax invoice availability, stainless steel mills were not active in procurement tenders, and the procurement pace continued to slow down. Amid the resonance of multiple bearish factors, stainless steel scrap prices fell in line with futures and finished products. Although stainless steel scrap still maintained a clear economic advantage over high-grade NPI, under the overall weak market atmosphere, cost support was difficult to translate into price support and failed to reverse the downward price trend. Overall, the stainless steel scrap market this week showed a weak pattern of "futures drag, weaker raw materials, and pressure on supply and demand." In the short term, bearish factors are expected to dominate, and stainless steel scrap prices are expected to remain in the doldrums.