This week, the ferrous metals series initially declined before rebounding, with raw materials outperforming finished products. The Israel-Iran conflict remained in the headlines. Last weekend, the Iranian Parliament passed a resolution to blockade the Strait of Hormuz, pending approval from the Supreme National Security Council. On June 24th, Israel and Iran announced a ceasefire, but friction persisted between the two sides, and the conflict had not yet fully subsided. In the first half of the week, inflation expectations weakened, and sentiment in the ferrous metals series cooled. As the weekend approached, raw materials led the gains, primarily due to stricter safety inspections in coal mines and the impending five-day closure of Mongolia's Naadam Festival, which heightened expectations of a tighter coking coal supply. Coupled with pig iron production halting its decline and starting to increase, support for raw materials strengthened. In the spot market, with the arrival of the off-season, end-users continued to purchase raw materials as needed. The spot-futures price spread narrowed, and some futures-to-spot traders engaged in purchasing and delivery activities...

[SMM Daily Briefing on Coke] In terms of supply, some coke enterprises suffered losses and implemented production cuts, leading to a slight tightening of coke supply. Additionally, market sentiment for stability has increased recently, and the shipment situation of coke enterprises has improved. On the demand side, steel mills' profitability has continued to improve, and the demand for coke has gradually picked up. Improved market expectations have driven a slight rebound in steel mills' enthusiasm for restocking, while controlling the arrival of goods. In summary, the fundamental contradictions in the coke market have decreased, and cost support has emerged. The short-term coke market may stabilize temporarily. [SMM Steel]

[SMM Coke and Coking Coal Inventory: Coke inventory at coking plants this week was 429,000 mt] Coke inventory at coking plants this week was 429,000 mt, down 37,000 mt MoM, or -7.9%. Coke inventory at steel mills was 2.479 million mt, down 26,000 mt MoM, or -1.0%. Coke inventory at ports was 1.25 million mt, down 20,000 mt MoM, or -1.6%. Coking coal inventory at coking plants was 2.358 million mt, down 26,000 mt MoM, or -1.1%.

At the June press conference of the National Development and Reform Commission (NDRC), the NDRC spokesperson stated that China's economy has been operating generally smoothly since the beginning of this year. From the supply side, agricultural production has been carried out in an orderly manner, and industrial and service sectors have seen steady growth. In May, the value-added industrial output of enterprises above designated size increased by 5.8% YoY, and the service sector production index grew by 6.2%, with the growth rate increasing by 0.2 percentage points from the previous month.

[SMM Steel Morning Meeting Summary: HRC futures and spot prices remained stable during the day, with overall trading volume being moderate and low-priced transactions being moderate. ] Yesterday, HRC futures first declined and then rose, with the most-traded contract closing at 3103, up slightly by 0.39%. In the spot market, market quotes remained stable, with overall trading volume being moderate and low-priced transactions being moderate. In terms of data, SMM released its weekly HRC balance data yesterday. In terms of production, some steel mills completed their maintenance this week, and HRC production continued to increase MoM. In terms of social inventory, the large-sample social inventory of HRC nationwide, as compiled by SMM, was 3.0017 million mt this week, up 22,200 mt MoM, or 0.75% MoM, and down 27.00% YoY. Social inventory nationwide began to build up. By region, except for east China, where destocking continued, inventories in central, south, north, and north-east China were all accumulating. In the short term, with the off-season inventory buildup turning point approaching and fundamental contradictions slowly increasing, HRC futures and spot prices are under pressure to rise. However, considering the currently low market inventory levels and the strong resilience of demand in some downstream industries, it is expected that the most-traded contract will fluctuate within the 3060-3150 range in the short term.

[SMM Analysis: Is the downstream demand for Ningbo HRC inventory still performing well amid continuous inventory drawdown?] According to the SMM survey, the large-caliber inventory of Ningbo HRC was 269,300 mt (as of June 25) this week, down 4,700 mt WoW. The HRC futures market continued to exhibit a fluctuating trend this week, with a macro vacuum during the week and prices fluctuating rangebound. As of the afternoon close on June 26, the most-traded hc2510 futures contract closed at 3,103 yuan/mt. This week, spot prices in mainstream cities fluctuated and fell, with prices down 10-40 yuan/mt from last Thursday.

[SMM Daily Review of Coking Coal and Coke] In terms of supply, some coking enterprises are operating at a loss and have implemented production cuts, leading to a slight tightening of coke supply. Additionally, market sentiment has stabilized recently, and the sales situation of coking enterprises has improved. In terms of demand, steel mills' profitability continues to improve, and their demand for coke is gradually picking up. Their purchasing enthusiasm has increased, and the control over arrival volumes has decreased. In summary, the fundamental contradictions in the coke market have decreased, and cost support has emerged. The coke market may stabilize temporarily in the short term.

He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, pointed out during a survey in Hebei from the 23rd to the 24th that it is necessary to thoroughly study and implement the important instructions of General Secretary Xi Jinping, earnestly implement the decisions and arrangements of the CPC Central Committee and the State Council, accelerate the construction of a unified national market, actively expand domestic demand and boost consumption, accelerate the construction of a new model for real estate development, develop new quality productive forces according to local conditions, and better promote high-quality economic development.

[SMM Steel Morning Meeting Summary: HRC futures and spot prices were mostly stable with individual declines during the day, and overall trading performance was moderate.] Yesterday, HRC futures fluctuated rangebound, with the 05 contract closing at 3,098, down slightly by 0.26%. In the spot market, market quotes were mostly stable with individual declines, and overall trading performance was moderate. In terms of data, HRC inventory data for some mainstream cities were released. This week, Shanghai's HRC inventory stood at 256,000 mt, down 23,300 mt WoW, a decrease of 8.34%; this week, Lecong's HRC inventory was 68.71 mt, up 20,300 mt WoW, an increase of 3.04%; this week, Shenyang's HRC inventory was 200,000 mt, up 25,000 mt WoW, an increase of 14.29%. Looking ahead, it is expected that the inflection point for HRC inventory buildup may occur within the next two weeks. The accumulation of short-term fundamental contradictions is relatively slow, and there is still support below. Considering the lack of macro news stimulus, it is expected that the 05 contract will fluctuate rangebound in the 3,060-3,150 range in the short term.

[SMM Daily Briefing on Coal and Coke] In terms of supply, most coking enterprises were operating at a loss, leading to voluntary production cuts and a certain decline in the actual supply of coke. Demand side, steel mill profits were moderate, and there was support for the rigid demand for coke. As a result, steel mills reduced their control over arrival volumes. In summary, the fundamental contradictions in the coke market have eased recently, coupled with the fact that cost support is no longer weakening. This week, the coke market may stabilize temporarily.