Important Macro Meetings Approaching, Short-Term Steel Prices Expected to Cease Decline [SMM Steel Industry Chain Weekly Report]

Forecast for Next Week: Key Macro Meeting Approaches, Steel Prices Expected to Stabilize in the Short Term This week, the ferrous metals series fluctuated in the doldrums. On the news front, the US-China tariff war continued to escalate, with cumulative tariffs on certain Chinese exports to the US reaching 245%. Domestically, central bank data showed that the preliminary statistics for March 2025 indicated a social financing stock of 4,229.6 trillion yuan, up 8.4% YoY, reaching a high level over the past year. In Q1, China's social financing increment totaled 1.518 trillion yuan, 237 billion yuan more than the same period last year, while RMB loans increased by 978 billion yuan, with a notable credit structure. According to the National Bureau of Statistics (NBS) data on April 16, preliminary calculations showed that Q1 GDP grew 5.4% YoY, marking a "good start" for China's economy. In the real estate sector, from January to March, new housing construction area was 129.96 million m², down 24.4%, narrowing the decline by 3.4 percentage points compared to 2024 and by 5.2 percentage points compared to January-February 2025, indicating a marginal recovery in the sector. Customs data revealed that China's steel exports in March were 10.456 million mt, up 30% MoM and 5.7% YoY, with a 6.3% YoY increase in steel exports from January to March, showing resilience in Q1 steel exports. In the spot market, steel prices remained weak this week, with end-user purchasing sentiment remaining subdued. Looking ahead, a key macro meeting is scheduled for month-end in China, reigniting market expectations for policy support, which has slightly strengthened the bottom support for the ferrous metals series. The macro meeting is expected to bring a brief uptick in steel prices. However, as the peak season nears its end, the upside room for end-use consumption is narrowing, and the steel price increase driven by macro sentiment recovery is expected to be limited. Iron Ore: Healthy Supply and Demand Fundamentals, Prices to Fluctuate Upward Iron ore prices rose this week. The US-China tariff war has temporarily subsided, improving market sentiment, though the actual impact remains to be seen. This week, iron ore fundamentals were supported, showing a strong supply and demand balance. Supply side, overseas shipments increased modestly, but port arrivals surged over 13%, remaining at high levels. Demand side, daily pig iron production continued to grow by 4,500 mt, higher than the same period last year, with iron ore demand remaining high, and port inventory significantly declined for two consecutive weeks. Industry data showed impressive performance, with rebar apparent demand expanding and inventory of the five major steel products declining further, indicating healthy supply and demand fundamentals in the steel industry. In the spot market, PB fines prices at Shandong ports rose 10 yuan/mt MoM. Amid mixed bullish and bearish factors, iron ore prices are expected to continue fluctuating upward next week, but the upside room may be relatively limited due to policy uncertainty and high prices. Coke: Supported by Rigid Demand, Second Round of Price Increase Expected Next Week On the supply side, after the first round of coke price increases, coke producers' profitability improved, and production enthusiasm remained moderate, with smooth shipments and low coke inventory. On the demand side, steel mills' pig iron production steadily rebounded, maintaining coke demand, but steel mills' coke inventory is at reasonable levels, maintaining purchasing as needed. In terms of raw material fundamentals, most coal mines maintained normal production, with recent coking coal price adjustments leading to cautious purchasing by downstream users, mainly purchasing as needed, and coal mine shipments were average. Online auctions showed mixed results, with some coal types having high starting prices and still experiencing failed auctions, with overall trading atmosphere being moderate. In summary, coke is supported by rigid demand, but the resistance to further price increases has intensified due to the trade war, and the coke market is expected to remain generally stable with a slight rise in the short term. Rebar: Steel Mills Strongly Stand Firm on Quotes, Spot Prices Face Dilemma This week, rebar prices fluctuated weakly, with the nationwide average price at 3,168 yuan/mt, down 11 yuan/mt MoM. On the supply side, profits for both BF and EAF steel mills continued to shrink, with limited enthusiasm for active production increases, mostly maintaining previous production levels, and some east China manufacturers continued to sell billets or switch product types, leaving little room for short-term construction material production increases. On the demand side, regional demand performance showed significant divergence, with better overall trading performance in east China and noticeable inventory reductions, while demand in northern markets was poor, mostly relying on direct supply orders from steel mills. Market feedback indicated that spot resources in central and northern markets were scarce, concentrated at steel mills, and steel mills showed strong sentiment to stand firm on quotes during recent price declines, making the spot market relatively resistant to price drops. Looking ahead, supply-side pressure is not significant, but the traditional "golden March and silver April" demand expectations have slightly fallen short, coupled with long-term bearish overseas macro news, market sentiment remains cautiously pessimistic. Before the introduction of domestic macro favorable policies, spot prices are expected to remain in a dilemma, with limited upward and downward adjustments, and the RB2510 contract is expected to fluctuate between 3,000-3,300. HRC: No Upward Drive Yet, Futures May Continue to Run Weakly This week, HRC futures prices fluctuated downward, with weekly fluctuations of around 100 points. On the fundamental side, some steel mills shifted pig iron production, leading to a slight decline in HRC production. With weak supply, social inventory declines expanded, but traders were mostly actively destocking, with low purchasing enthusiasm, and in-plant inventory accumulated. Under these combined effects, total inventory was 5.0937 million mt, down 161,800 mt MoM. Looking ahead, steel mills' production enthusiasm remains strong, with few new maintenance plans, and supply pressure is expected to continue to rebound. However, both domestic and foreign demand in April will remain resilient, and inventory is expected to continue destocking next week. According to the SMM survey, pig iron production will continue to rebound, but profits are narrowing, and new maintenance is increasing, shaking cost support. Overall, HRC is expected to maintain seasonal destocking in the short term, with significant overseas macro disturbances. Before domestic macro policies are introduced, fundamental destocking may only provide support, with upward drive appearing weak, and the HC2510 contract is expected to run weakly between 3,130-3,250 next week. Steel Scrap: Narrow Fluctuations Expected Next Week, Market Operations to Focus on Quick In and Out On the supply side, recent steel scrap price increases have boosted some merchants' enthusiasm for shipments, with overall market inventory at medium-low levels. On the demand side, losses for EAF steel mills continued to expand, with some electric furnace plants reducing operations due to slow demand for finished products, limiting steel scrap demand growth. Looking ahead, steel scrap prices are expected to fluctuate narrowly next week, with cautious market sentiment and operations likely focusing on quick in and out. 1. For data involved in the report, please visit the SMM database (https://data-pro.smm.cn/). 2. For more SMM steel information, analysis reports, databases, etc., please contact SMM Steel Division Li Ping at 021-51595782. *The views in this report are based on market information collected and comprehensive assessments by the SMM research team. 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