Every $10 increase in crude oil prices is expected to raise the per-ton extraction cost of large iron ore mines by an average of $0.3, while the cost for small mines is expected to rise by about $2.85. High-cost small mines, especially iron concentrate producers, will be very vulnerable when facing cost shocks, and mines with different product types will face varying degrees of impact.

SMM April 21: As the anti-involution policy continued to advance, the second round of coke price hikes was officially implemented. This, combined with persistently tight spot supply and demand, capacity constraints caused by Daqin Railway maintenance, the highlighted coal substitution advantage driven by high oil prices, and incremental demand from continued increases in hot metal production, created multiple positive factors that drove the coal mining sector to a two-day winning streak. Specifically, on the supply side, the Daqin Railway spring concentrated maintenance restricted north-to-south coal transportation capacity, inventories continued to decline, and the implementation of coke price hikes further transmitted cost support, pushing coal prices steadily upward. On the demand side, a stronger-than-usual off-season pattern emerged, with hot metal production continuing to edge up, coupled with significant YoY and MoM increases in daily consumption at coastal power plants. Restocking demand from the construction materials and other industries was released ahead of the Labour Day holiday, and with power plant inventories at low levels, seasonal restocking demand was activated early. In addition, tensions in the Middle East pushed up international oil prices, highlighting the economic advantage of coal-fired power, while the defensive attributes of the coal sector attracted some capital inflows, jointly driving the sector higher. As of the close on April 21, the sector gained 2.27%, with individual stocks performing actively. Gansu Energy Chemical, Huayang New Material Technology, Yankuang Energy, Shaanxi Coal Industry, and Lu'an Clean Energy led the gains. Futures market: As of the daytime close on April 21, ferrous metals mostly rose, with coking coal up 1.53% and coke up 2.42%. Spot market Hot metal production is expected to continue edging up this week On April 15, the blast furnace operating rate of the 242 steel mills tracked by SMM rose WoW. The sample steel mills' daily average hot metal production increased WoW. Last week, according to the latest SMM survey, no new blast furnace maintenance was reported, and a total of 2 blast furnaces resumed production, mainly concentrated in Shanxi. Currently, blast furnace profits were under pressure, and most steel mills produced normally as planned. The pace of maintenance and production resumptions remained generally stable, with hot metal production staying relatively steady. Looking ahead to this week, hot metal production is expected to continue edging up. Spot market: On April 21, the Linfen low-sulphur coking coal price was quoted at 1,530 yuan/mt. The Tangshan low-sulphur coking coal price was quoted at 1,550 yuan/mt. The nationwide average price of first-grade metallurgical coke (dry quenching) was 1,845 yuan/mt. The nationwide average price of quasi-first-grade metallurgical coke (dry quenching) was 1,705 yuan/mt. The nationwide average price of first-grade metallurgical coke (wet quenching) was 1,490 yuan/mt. The nationwide average price of quasi-first-grade metallurgical coke (wet quenching) was 1,400 yuan/mt. Coking coal market: Production at some mines that had previously cut production recovered somewhat, but major mines were still affected by safety inspections, and the incremental supply of coking coal remained limited. Moreover, futures rallied, market sentiment warmed notably, stimulating some coal grades to stabilize and rebound. In the short term, coking coal prices may hold up well. Coke market: In terms of supply, coke enterprises' per-mt profitability has recovered, production enthusiasm was moderate, shipments were relatively smooth, and in-plant coke inventory remained at low levels. Demand side, steel mills maintained strong production enthusiasm, hot metal production edged up, providing solid just-in-time procurement support for coke. Additionally, with the Labour Day holiday approaching, some steel mills released pre-holiday restocking demand. Overall, the coke supply-demand structure remained tight, and the coke market may hold up well in the short term. Institutional Views A Datong Securities research report showed: on coking coal, driven by downstream restocking and coke price hike expectations, port coking coal prices rose, while mine-mouth coal prices showed some divergence. At ports, Shanxi-origin coking coal warehouse-pickup prices at Jingtang Port rose WoW, while mine-mouth prices generally showed a stable-to-declining trend. Internationally, Australian Peak Downs hard coking coal CFR China prices were flat WoW. In the short term, with continued growth in hot metal production, sentiment boost from coke price hikes being implemented, and downstream restocking demand release, the coking coal market may see slight upward momentum. A Shanxi Securities research report noted: currently, Daqin Line maintenance-related destocking and high landed costs of imported coal supported coal prices. Power plant daily consumption was at seasonal lows, while chemicals, steel mills, and other industries drove coal demand. Attention should be paid to the sustainability of just-in-time procurement from non-power industries and the summer electricity consumption peak after May. Investment recommendation: high uncertainty from US-Iran conflicts corresponds to high volatility, but oil prices are unlikely to decline significantly in the short term. Recovery signals have been confirmed, coal PPI is about to turn positive, coal prices are expected to rise, and coal stocks are poised for a Davis Double Play. A Guohai Securities research report suggested that, from a broader perspective, the supply-side constraint logic for the coal mining industry remains unchanged, while demand may experience periodic fluctuations, with prices also showing certain oscillations and dynamic rebalancing. From the long-term industry development trend, the aforementioned driving factors still exist, and coal prices still have upward momentum over the long term. The process may be tortuous, but the direction should be clear. Leading coal enterprises have high asset quality, abundant cash flows on their books, exhibiting "five highs" — high profitability, high cash flow, high barriers, high dividends, and high margin of safety. Since 2025, multiple central and state-owned coal enterprises have initiated share buyback and asset injection plans for their publicly listed firms, also releasing positive signals, demonstrating confidence in coal enterprise development, and enhancing corporate growth potential and stability. A Guangda Futures research report analyzed: Coking coal: supply side, most mines at production areas operated largely normally. There were reports that Mongolian coal throughput decreased due to factors such as fuel shortages. Recently, downstream buyers moderately restocked raw material coal, and overall inventory continued destocking. Demand side, steel mills maintained high hot metal production, with a preference for coke procurement. The second round of coke price increases was implemented, and coking enterprises restocked some coal grades with higher cost-effectiveness. Coking coal futures are expected to hold up well in the short term. Coke: Supply side, coking enterprises in some regions were constrained in operations due to government ultra-low emission retrofit requirements. Coking enterprises saw good shipments, and coke inventory mostly remained at low levels. Demand side, steel mills had a relatively strong willingness to produce, and mainstream steel mills accepted the second round of coke price increases. Transportation restrictions emerged in some regions, and steel mills experienced continuous destocking, with high procurement enthusiasm. Coke futures are expected to fluctuate upward in the short term. Southwest Futures stated: In the short term, changes in the Middle East situation may still have sentiment impact on futures prices, but the impact on the actual supply-demand pattern of coking coal and coke is relatively small. Coking coal side, production at some mines in major producing areas was affected, but the impact on production was limited. Demand side, the online auction atmosphere improved recently, and quotes for some coal grades were raised. Coke side, some coking enterprises currently cut production, but the change in supply was relatively small; demand side, national daily hot metal production may continue to rebound, and demand expansion provides support for coke prices; the second round of spot coke price increases is being implemented. From a technical perspective, coking coal and coke futures may continue to move sideways in the medium term. Strategy-wise, investors may watch for buying opportunities at low levels and pay attention to position management. Recommended reading:

Today, Dalian iron ore futures first rose then retreated. The most-traded contract I2609 ultimately closed at 784 yuan/mt, up 0.64% from the previous trading session. Spot prices fell 0-2 yuan/mt from the previous trading day. Traders were active in quoting, while steel mills restocked on demand; overall spot transactions were thin. Fundamentals side, this week's survey results showed that blast furnace maintenance affected hot metal production by 1.2625 million mt, down 50,000 mt WoW, and is expected to continue declining by approximately 3,000 mt next week. Overall demand remained solid, with robust rigid demand for iron ore and relatively stable downside support for ore prices. News side, market rumors suggested that port inventory previously subject to restrictions was expected to be released this week, but no further updates have emerged so far. Some market participants adopted a strong wait-and-see stance out of risk and price considerations. Therefore, in the short term, barring new developments, ore prices are expected to continue to fluctuate at highs. If previously restricted inventory is released, it may weigh on ore prices in the short term, leaving them in the doldrums.

[Domestic Iron Ore Brief Review] The domestic ore market in the Tangshan area was relatively stable. Currently, the ex-factory prices of 66-grade iron ore concentrates on a dry basis, tax included, were 975-980 yuan/mt. Most mine and beneficiation plants were in production suspension, with only a few operating at low volumes or on a flexible basis. Iron ore concentrates production was low, and considering factors such as costs, asking prices remained firm. Today, local sources reported that a Level 2 environmental protection alert was once again activated, but most blast furnaces at steel mills were currently operating normally.

The Italian steel group Marcegaglia signed an agreement on April 15, 2026, with technology partner Danieli to construct a new steel mill in Fos-sur-Mer, France. Known as the "Mistral" project, the total investment is estimated at €1 billion, with the plant expected to produce over 2 million tons of steel annually via Electric Arc Furnace (EAF) technology and up to 3 million tons of hot-rolled coil (HRC). Utilizing scrap metal and low-carbon Direct Reduced Iron (DRI) powered by nuclear and renewable energy, the facility aims to reduce CO2 emissions by 80% compared to traditional blast furnace routes.

Stegra (formerly H2 Green Steel) announced on April 14, 2026, that it has reached a principal agreement for a €1.4 billion ($1.65 billion) financing round led by a Wallenberg Investments consortium. The funding ensures the continuation of construction for the world’s first large-scale green steel plant in Boden, Sweden, which utilizes green hydrogen instead of coking coal. While the original late-2025 deadline has passed, the new capital allows for a ramp-up of construction activities, with the project aiming to reduce CO₂ emissions by up to 95% compared to traditional blast furnace production.

DCE iron ore futures trended stronger today. The most-traded contract I2609 ultimately closed at 764 yuan/mt, up 0.99% from the previous trading session. Spot prices rose 2-5 yuan/mt from the previous trading day. Traders quoted actively, while steel mills mostly remained on the sidelines purchasing on demand; overall spot transactions were moderate. Fundamentals, the SMM survey showed that the blast furnace utilization rate at 242 sample steel mills was approximately 90.21% this week, up 0.91% WoW. Daily average pig iron production reached 2.4441 million mt, up 5,100 mt WoW. Overall rigid demand for iron ore remained solid and was expected to edge up next week. News, market rumors suggested that restrictions on certain previously restricted categories had been partially lifted, and iron ore arriving subsequently could be freely picked up from ports, while the previously accumulated high inventory remained restricted. Overall iron ore supply was expected to edge up, but given the current high demand, the incremental supply was expected to be well absorbed, posing no bearish factors. Therefore, iron ore prices were likely to show strong downside support in the short term, and fluctuate upward.

[SMM Weekly Maintenance Statistics] According to SMM statistics, this week (April 11 to April 17), the hot metal impact volume resulting from blast furnace maintenance was.....

According to the latest data released by the General Administration of Customs China (GACC) imported 104.74 Mt of iron ore and concentrates in March 2026, representing a month-on-month increase of 7.38 Mt , or 7.6% . Cumulative imports for the first quarter reached 314.76 Mt, marking a 10.5 % Y-O-Y growth. Beyond underlying fundamental factors, geopolitical friction also contributed to the elevation of iron ore import volumes during March. Specifically, escalating tensions in the Middle East have severely disrupted commercial shipping lanes traversing the Strait of Hormuz. Although direct export volumes from the Middle Eastern region to China remain comparatively marginal, the destabilisation of global logistics networks precipitated by regional conflicts has forced vessels initially scheduled to transit through the Middle East or adjacent maritime corridors to reroute. Consequently, these diverted cargoes have been redirected towards East Asian markets, prominently including China. Furthermore, the progressive ramp-up of domestic blast furnace utilisation rates throughout March has augmented the steel sector's raw material requirements, thereby providing an additional stimulus for iron ore imports. Looking ahead to April, the direct impact of the Middle Eastern situation on China's aggregate iron ore import volumes is anticipated to remain relatively constrained. However, should the regional conflict fail to de-escalate substantively within the month, international dry bulk vessels may continue to bypass Middle Eastern ports for transshipment, inadvertently resulting in China passively absorbing additional cargoes from alternative origins. Additionally, as major overseas mining projects progressively advance, global iron ore supply remains generally accommodative. Dispatches, spearheaded by the Simandou project—which boasts an estimated annual output of 20 million tonnes—are projected to generate a moderate uplift in iron ore shipments directed towards China in April. From a cyclical perspective, the second quarter conventionally represents a traditional peak season for iron ore dispatches. Synthesising these multifaceted variables, we project that Chinese iron ore import volumes will exhibit a tangible upward trajectory throughout April.

According to the latest data from the General Administration of Customs, China imported 104.743 million mt of iron ore and concentrates in March 2026, an increase of 7.375 million mt MoM, up 7.6% MoM; cumulative imports of iron ore and concentrates from January to March totaled 314.762 million mt, up 10.5% YoY. Beyond fundamental factors, geopolitical conflicts also contributed to the increase in iron ore imports in March to a certain extent. Specifically, the escalation of tensions in the Middle East severely disrupted commercial shipping along the Strait of Hormuz. Although direct exports from the Middle East to China were relatively small, the disruption to the global logistics system caused by regional conflicts forced some vessels originally planned to transit through the Middle East or pass through those waters to reroute. These resources were redirected to East Asian markets including China. In addition, as domestic blast furnace capacity utilization rates gradually improved in March, the steel industry's demand for ore further increased, thereby stimulating iron ore imports. Looking ahead to April, although the direct impact of the Middle East situation on China's total iron ore imports is relatively limited, if the Middle East conflict fails to achieve substantive de-escalation within the month, some international bulk carriers are likely to continue avoiding Middle Eastern ports for transshipment, resulting in China passively receiving more cargoes from other regions to a certain extent. Furthermore, as large-scale ex-China mining projects progressively advance, global ore supply remains generally ample, and shipments led by Simandou (estimated at 20 million mt for the full year) are expected to bring a certain degree of uplift to iron ore supply exported to China in April. From a seasonal perspective, Q2 is typically the traditional peak shipping season for iron ore. Therefore, taking all the above factors into consideration, China's iron ore imports in April are expected to show a certain growth trend.