[SMM Steel] China to crack down on overcapacity in steel and heavy industries

[Industrial Silicon Prices Fluctuated; Polysilicon Price Sentiment Was Weak]: This week, the silicon metal market fluctuated significantly on news, falling first and then rising. As of March 5, SMM east China oxygen-blown #553 silicon was at 9,000-9,100 yuan/mt, with the transaction center moving down WoW; some suppliers quoted at 9,200 yuan/mt. The futures market fell first and then rose, with large fluctuations; amid disruptions from news such as expectations for Xinjiang electricity prices and environmental protection, futures prices recovered from the bottom. As futures prices rose, trading firms engaging in both spot and futures market raised their quotes accordingly; silicon enterprises held quotes steady or increased them by 100 yuan/mt. Low-priced supply in the market shifted from spot-futures to silicon enterprises, and downstream users purchased as needed, selecting lower-priced offers.

[SMM Daily Brief Review of Coking Coal and Coke] In terms of supply, expectations for the implementation of a coke price cut were relatively strong, dampening coke producers’ willingness to produce. Coke supply tightened slightly, but coke producers saw inventory buildup and were proactive in shipments. Demand side, the Two Sessions had already convened, and some steel mills had already carried out blast furnace maintenance. The daily average hot metal output declined, weakening rigid demand for coke. Meanwhile, some steel mill profits were currently poor, and their willingness to seek profits from the raw material side was relatively strong. Overall, the first round of the coke price cut was expected to be implemented this Friday, and the coke market might remain in the doldrums in the short term.

[Domestic Iron Ore Brief Commentary: Iron Ore Concentrates Prices in West Liaoning May Remain in the Doldrums] The west Liaoning domestic ore market saw no significant fluctuations. The current ex-factory prices of 66 grade iron ore concentrates on a wet basis, excluding tax, were 710-720 yuan/mt. The pace of supply and demand operations was relatively slow, making it difficult to boost market trading activity; some mines and beneficiation plants said they may resume normal production after the Two Sessions, with low enthusiasm for shipments and strong wait-and-see sentiment.