Data: SHFE, DCE market movement (May 18)

The most-traded HRC contract fluctuated downward today, closing at 3,429 at the end of the session, down 1.04% intraday. HRC spot prices dropped 10-20 yuan/mt today. In terms of supply, some rolling lines resumed production after maintenance this week, and HRC production edged up WoW, but the pressure remained moderate. Demand side, spot transactions were lackluster today. As futures pulled back, demand from futures-spot arbitrage and speculation weakened, with the market dominated by low-price purchases. Cost side, iron ore was in a pattern of strong supply and demand, while coking coal and coke performed on the weaker side, and cost support remained weak. Looking ahead, the supply-demand imbalance in HRC was relatively small, but caution was still needed in the short term .....

[SMM Steel] The British Chambers of Commerce (BCC) warned that proposed UK steel quota reductions and higher above-quota tariffs could add millions of pounds in costs for downstream industries including construction, engineering, and manufacturing. The BCC said the planned 50% above-quota tariff and tighter quotas risk disrupting supply chains, reducing competitiveness, and forcing companies to shift sourcing toward cheaper overseas suppliers. The group also warned that manufacturers relying on imported specialty steel grades unavailable domestically could face production disruptions. The BCC urged the UK government to phase in tariff increases, extend transition measures from 3 months to at least 12 months, and accelerate a UK-EU steel trade agreement.

[SMM Steel] The European Commission launched a consultation on May 13 regarding draft CBAM rules that could allow EU importers to receive discounts on CBAM certificate costs if imported goods have already been subject to carbon pricing outside the EU. The proposal distinguishes between domestic and international carbon credits, with international credits limited to 10% of declared emissions and required to comply with Article 6 of the Paris Agreement. Currently, only Japan, South Korea, and Vietnam allow international credits within their carbon markets, according to ICAP. The consultation period will run until June 10.