MMi Daily Iron Ore Report (August 23)

[Vietnam] European buyers are meeting near-term requirements with more competitively priced galvanized coil from Vietnam, weighing on sales of Indian-origin material. Meanwhile, tight supply and stronger domestic consumption have prompted some Indian suppliers to pause galvanized steel export offers. Market participants expect Indian export offers to rise by another USD 10–20/tonne, further highlighting the price competitiveness of Vietnamese material in the European market.

Malaysia’s steel market remained broadly stable this week. Domestic HRC offers held at around MYR 2,200/tonne EXW for regular buyers and MYR 2,230/tonne EXW for non-regular buyers. Rebar offers were mainly at MYR 2,200–2,220/tonne, while some lower-priced material was heard at around MYR 2,180/tonne. C12D wire rod delivered prices remained unchanged at MYR 2,300/tonne. Indonesian-origin wire rod was offered at around USD 530/tonne CFR Malaysia, appearing more competitive on a headline basis, though duties, port charges and inland freight still need to be considered. In the semi-finished market, some local mills may schedule maintenance in October or November, leading to cautious sales of large billet and slab cargoes. Small-volume or inventory material may still be available, while January-shipment offers could emerge soon. The market will continue to monitor maintenance plans, new shipment offers and actual transaction levels.

Last week, ferrous metals showed a narrow consolidation pattern overall. Among them, coking coal and coke were hit by expectations of the "stable coal production and supply guarantee" policy from three ministries, posting larger declines and hitting new monthly lows; HRC and rebar prices were basically flat; iron ore saw its weekly average edge up MoM, supported by ocean freight rates. The core contradiction remained concentrated in the carbon element: steel mill losses widened, daily hot metal production continued to decline, and steel mills' desire to bargain down raw material prices strengthened; meanwhile, coking coal weakened first under the impact of stable production and supply guarantee policy expectations, and the loosening cost side dragged down the overall valuation of ferrous metals. From a data perspective, HRC spot prices in US dollar terms fell $4/mt MoM, export prices remained relatively firm, sheets & plates export prices showed mixed performance, long steel product prices rose $1-4/mt MoM, and export margins improved slightly. Looking ahead, on the supply side, steel mill hot metal production is expected to continue declining, raw materials are likely to remain under pressure, coking coal and coke may still weaken under the weight of policy expectations, and cost support will loosen further. On the demand side, the low production and low inventory pattern in steel provides some bottom support for prices, and with domestic demand maintaining resilience and overseas demand expected to gradually recover and drive steel export growth, overall steel demand remains on an improving track, with support below prices. On the macro front, repeated tightening expectations outside China are creating periodic pressure on risk assets, market sentiment is unlikely to recover significantly, and price fluctuation space is limited. Overall, with bullish and bearish factors intertwined, ferrous metals lack a trend driver in the short term and are expected to continue consolidating in a narrow range. Export prices will also show a consolidation pattern.