[SMM EU Weekly Review] New Policy Ignites EU Sector; Melt and Pour Traceability and Slab Outages Drive Full Realization

Ferrous metals mostly showed a first-up-then-down trend, yet still posted certain gains MoM overall, with coking coal and coke leading the gains and finished steel following higher. The core driver of the rally was a confluence of bullish factors: first, supply-side disruptions in coking coal dominated, as Shanxi production resumptions fell severely short of expectations and supply remained tight, with mines holding back from selling and auctions closing at high premiums, quickly materializing the cost-push logic; second, cost support moved up in steps, as the fourth coke price hike was implemented on September 3, iron ore coarse fines saw destocking for two consecutive weeks, and news of the Minas mine suspension boosted ore prices higher, while hot metal output rebounded to a daily average of 2.408 million mt, keeping demand-side support for raw materials intact. After the early-week gains, the China-Mongolia heads-of-state meeting saw an exchange of views on border port railway construction and other issues, raising market concerns that Mongolian coking coal supply may gradually recover, which stalled the rise in coking coal and coke futures and dragged other ferrous metals into a pullback. From a data perspective, as spot cargo remained weak and the follow-through rally was not strong, HRC spot prices in US dollar terms rose $10/mt MoM, sheets & plates export prices rose $5-6/mt, long steel prices rose $7-8/mt MoM, and export margins continued to narrow. Looking ahead, the market is expected to maintain a cost-driven firm pattern in the short term, but risks of a retreat after rapid rise are building. Coking coal production resumptions are falling short of expectations and tight supply is hard to resolve, keeping cost support solid; after the coke price hike took effect, the tug-of-war between coke and steel intensified, with coke producers limiting production and holding back from selling amid losses while steel mills pressed for deliveries. If this continues, the cost center will keep shifting higher. Focus should be on the pace of coking coal production resumptions and marginal changes in end-user transactions. Export prices are also expected to stay high on the basis of this week's levels.

The following table shows the ferrous and nonferrous metals movement on the SHFE and DCE on 04 Sep , 2026

The primary driver in the Middle East market shifted this week from geopolitical disruptions to Iran's currency crisis. The rial depreciated by nearly 15% against the US dollar over two weeks, prompting steel mills to accelerate shipments and lock in foreign exchange, leading to a downward shift in export quotes across the board: slabs declined to 420 USD/tonne FOB, while billets slid to 410–415 USD/tonne FOB. Specifically, a lot of about 10,000 tonnes of billet was transacted at 413 USD/tonne FOB, and dense tenders from multiple electric arc furnace (EAF) mills intensified supply competition; a deal to Oman was recorded at 440 USD/tonne CFR, though vessels remain congested and delayed at port. On the domestic front, currency depreciation drove a general price surge—domestic HRC prices rose to approximately 537–589 USD/tonne EXW, and rebar and pipe prices followed with about 9% gains; however, this was driven purely by replacement costs, with end-users engaging only in hand-to-mouth procurement, while imported HRC previously purchased at 560 USD/tonne FOB remained undeliverable due to Caspian Sea shipping blockages. Iranian rebar exports to Iraq were transacted at only around 550 USD/tonne delivered amid weak demand. Looking ahead to next week, if the rial continues to depreciate, it will force Iranian resources to further cut prices for volume, putting downward pressure on regional semi-finished products and maintaining a generally soft operational posture.