SMM Daily Comments of Ferrous Metals Market

SHANGHAI, Mar 8 (SMM) -

Macro

China

Minister of Housing and Urban-Rural Development of PRC: Maintain high confidence in the stabilisation and recovery of the real estate market

Minister of Housing and Urban-Rural Development of PRC: Support high-quality state-owned and private real estate enterprises to meet their reasonable financing needs

Overseas

US Fed Chairman Powell: Accelerate the rate hikes if necessary, peak interest rates may be higher than expected

Raw materials:

Iron ore

Yesterday, iron ore futures fluctuated upwards. The most-traded I2305 contract closed at 909.5 yuan/mt and rose 1.34%. The overall transactions weakened as steel mills purchased cautiously and the traders shipped modestly. Traded price of PB fines in Shandong was 915-916 yuan/mt, up 5-20 yuan/mt from the previous trading day, and that of PB fines in Tangshan stood at 933 yuan/mt, up 17 yuan/mt.

According to the data of the General Administration of Customs, China imported 194.20 million mt of iron ore and concentrates in January and February, up 7.3% year-on-year, slightly pushing up the iron ore supply in China. The increase in pig iron output hiked up iron ore prices.

Coke

On March 7, the traded price of quasi-first grade metallurgical coke (coke dry quenching) in Lvliang city, Shanxi province, was 2,890 yuan/mt (ex-factory), flat from the previous trading day.

Coking coal supply shrank, but downstream sectors also purchased on demand. Quotes offered by coal mines stabilised temporarily amid the cooling market sentiment.

Shanxi Coking Coal Group raised the prices of coke wet quenching and coke dry quenching by 100 yuan/mt and 110 yuan/mt respectively. Environmental protection-related production restrictions limited the production of some coke companies. Besides, the costs of some coke companies increased, hence some coke producers intended to cut their production. On the demand side, steel mills maintained high operating rates, and the demand for coke was better.

Steel scrap

Yesterday, traded price of steel scrap dipped 20-70 yuan/mt at domestic mainstream steel mills.

Yesterday, traded price of steel scrap dipped 20-70 yuan/mt at domestic mainstream steel mills.

Finished products:

Rebar

Rebar futures prices added 0.83% yesterday.

On the supply side, the small profits are unlikely to encourage BF steel mills to increase the production significantly. The profits of EAF steel mills were 0-100 yuan/mt, EAF steel mills slightly increased the production partly due to administrative requirements. As such, the rebar output increases seasonally. On the demand side, the market demand was stable. The rebar futures rebounded slightly yesterday, and thus the speculative demand increased.

HRC

On the spot market, the transactions improved yesterday, but the terminal demand weakened in yesterday afternoon.