This week, ferrous metals series experienced greater volatility, with prices falling at the beginning of the week and slightly recovering towards the end of the week. However, the overall decline for the week was significant. On the macro front, as the week drew to a close, the US Court of International Trade blocked the Trump administration's reciprocal tariff and fentanyl tariff. But by Friday, news emerged that the ruling of the US Court of International Trade had been suspended. In fact, even if the ruling were implemented, tariffs on specific industries such as automobiles and auto parts, steel, and aluminum would not cease, and the actual impact on steel would be limited. Therefore, it is not advisable to be overly optimistic...

[SMM Daily Commentary on Coking Coal and Coke] In terms of supply, affected by the pressure of shipments, some coking enterprises have experienced inventory accumulation, and the coke supply has gradually become looser. However, the losses of coking enterprises are still within an acceptable range, and their production enthusiasm remains moderate. On the buyer side, affected by the traditional off-season for steel consumption, steel mills have significantly slowed down their purchasing pace, mainly purchasing coke as needed. In summary, the market sentiment remains bearish, and the coke market is expected to be in the doldrums in the short term, with a third round of price cuts anticipated for coke next week.

According to SMM data, as of May 30, the average cold-hot price spread nationwide was 443 yuan/mt, down 1.0% WoW from the weekly average, and down 27.5% MoM from the monthly average. However, recently, the cold-hot price spread, which had been falling rapidly since early April, finally showed signs of stopping falling and stabilizing. According to the data, the average cold-hot price spread in late May was 455 yuan/mt, up 1.6% WoW from the first half of the month.

[SMM Coke and Coking Coal Inventory: Coke inventory at coking plants this week was 375,000 mt] Coke inventory at coking plants this week was 375,000 mt, up 27,000 mt or 7.8% WoW. Coke inventory at steel mills was 2.619 million mt, down 17,000 mt or 0.6% WoW. Coke inventory at ports was 1.42 million mt, down 50,000 mt or 3.4% WoW. Coking coal inventory at coking plants was 2.559 million mt, down 17,000 mt or 0.7% WoW.

Fundamentally speaking, on the supply side, the production profits of construction steel from BF and EAF steel mills have diverged. BF steel mills have relatively considerable profits and mostly maintain normal production status. However, EAF steel mills are facing poor profitability and difficulties in scrap collection, with most maintaining production status during off-peak and mid-peak electricity pricing periods. On the demand side, market sentiment has loosened somewhat, with downstream procurement enthusiasm increasing. Meanwhile, end-users have begun stockpiling ahead of the holiday. According to the SMM survey, the total inventory of rebar stands at 5.4782 million mt, down 3.66% WoW, indicating an accelerated pace of inventory reduction. Overall, the current inventory pressure on construction steel is relatively small, and downstream demand for stockpiling ahead of the holiday remains. The market transaction atmosphere has heated up, and it is expected that construction steel prices will consolidate and hold up well in the short term.

First Batch of Special Bonds for Acquiring Existing Commercial Housing Lands Recently, the first batch of special bonds nationwide to support the acquisition of existing housing landed in Zhejiang. The initial funding of 1.653 billion yuan will support the construction of a total of eight affordable housing projects in Huzhou, Wenzhou, and Jiaxing. Industry insiders believe that Zhejiang's promotion of government special bonds to acquire existing commercial housing not only reflects the policy's innovation and foresight but also demonstrates comprehensive support for destocking the real estate market, providing a reference for other regions.

[SMM Daily Coke Market Briefing] In terms of supply, the profit and loss situation of most coking enterprises remains within an acceptable range, with production temporarily stable and coke supply fluctuating at highs. Demand side, seasonal demand for steel has decreased, with pig iron continuing its downward trend. Moreover, south China has entered the rainy season, and the high-temperature and rainy weather has affected project commencement, further dampening the enthusiasm of steel mills to purchase coke. In summary, the market sentiment remains bearish, and the coke market is expected to be in the doldrums in the short term, with a third round of price cuts expected for coke next week.

According to SMM data, the average weekly HRC production in May was 3.274 million mt. This week, HRC production was 3.2338 million mt, down 11,400 mt WoW. Compared to the same period in previous years, current HRC production was 7.08% lower YoY. Based on the latest rolling sample of weekly HRC production released by SMM, current HRC production was 3.9835 million mt, down 3.72% YoY.