[SMM Coke and Coking Coal Inventory: Coke inventory at coking plants continued to decline this week] This week, coke inventory at coking plants was 401,000 mt, down 28,000 mt MoM, or -6.5%. Coke inventory at steel mills was 2.478 million mt, down 1,000 mt MoM, or -0.0%. Coke inventory at ports was 1.17 million mt, down 80,000 mt MoM, or -6.4%. Coking coal inventory at coking plants was 2.407 million mt, up 49,000 mt MoM, or +2.1%.

The central bank announced that on July 3, 2025, the People's Bank of China conducted reverse repo operations worth 57.2 billion yuan through fixed-rate and quantity-based tenders, with an operating interest rate of 1.40%. Both the bid volume and the awarded volume were 57.2 billion yuan. According to data from Tonghuashun iFinD, reverse repo operations worth 509.3 billion yuan with a 7-day maturity were due today.

[SMM Steel Morning Meeting Summary: Supply Tightening Expectations Persist, HRC Prices Hold Up Well] Yesterday, HRC futures initially declined before rebounding, with the most-traded contract closing at 3,208, marking a daily increase of 1.45%. In the spot market, spot prices stabilized and edged up, with trading volumes increasing, though some transactions were driven by calendar spread strategies, and no significant increase in end-use demand was observed. In terms of supply, this week's HRC production increased by 2,900 mt MoM, with weekly production reaching 3.3685 million mt, indicating that the supply pressure for HRC remains relatively high. On the demand side, end-use demand from the manufacturing sector remains relatively resilient, but seasonal decline trends have also emerged. On the cost side, according to the SMM survey, under the influence of production control policies, pig iron production decreased by 4,200 mt this week, but still remained at a high level, and the support from furnace charge is unlikely to collapse in the short term. Looking ahead, with the current increase in HRC supply pressure and continuous accumulation of total inventory, but absolute contradictions remaining relatively small, the market still expects relief from the July Central Political Bureau Meeting and supply-demand structural pressures. Coupled with moderate cost support, it is anticipated that the most-traded HRC futures contract will continue to consolidate at a high level in the short term.

Today, HRC futures initially declined and then rebounded, with the most-traded contract closing at 3208, marking a daily increase of 1.45%. In the spot market, spot prices stabilized and showed signs of upward movement, with trading volume increasing. However, some of the activity was attributed to calendar spread arbitrageurs entering the market, and there was no significant increase in end-use demand. In terms of supply, this week's HRC production increased by 2,900 mt MoM, with weekly production reaching 3.3685 million mt. The supply pressure for HRC remains relatively high. On the demand side, terminal demand in the manufacturing sector remains relatively resilient, but seasonal decline trends have also emerged. On the cost side, according to the SMM survey, under the influence of production control policies, pig iron production decreased by 4,200 mt this week, but it still remains at a high level. The support from furnace charge is unlikely to collapse in the short term. Looking ahead, the current supply pressure for HRC is intensifying, and total inventory continues to accumulate, but the absolute contradiction remains relatively small. The market still expects relief from the pressure on the supply-demand structure at the July Central Political Bureau meeting, coupled with moderate cost support. It is anticipated that the most-traded HRC futures contract will continue to consolidate at a high level in the short term.

Overall, although this is the first time that Thailand has initiated an anti-circumvention investigation against cold-rolled steel from China, in fact, it initiated an anti-dumping investigation against cold-rolled steel products from China as early as August 2012, followed by a final determination in a sunset review, and on January 23, 2025, it filed another sunset review case. Based on the timeline, a final determination in the review may be made in early 2026. Considering that the anti-dumping measures have been in place for many years and cover a wider range of products, the actual impact of anti-dumping on the products involved has already been reflected in previous years. However, due to claims by Thai domestic producers, such as Thai Cold Rolled Steel Sheet Public Company Limited, that Chinese exporters are circumventing anti-dumping duties, Thailand has once again initiated an anti-circumvention investigation against China. According to data from the General Administration of Customs, the total volume of the products involved exported from China to Thailand in the first five months of 2025 was 16,300 mt, accounting for 9.39% of China's total export volume of the products involved, indicating a relatively significant overall impact. In extreme cases, this may lead to a decrease of 81,500 mt in China's total export volume in 2026...

[SMM Daily Briefing on Coal and Coke] In terms of supply, most coke enterprises are experiencing minor losses, but the impact on production is relatively small. Coke supply remains relatively stable, and the shipment situation of coke enterprises is moderate, with their own coke inventory continuing to decline. Demand side, pig iron production at steel mills remains high, creating a rigid demand for coke. Some steel mills with low inventory are still engaging in restocking. In summary, the fundamental contradictions in the coke market are not obvious, and cost support is solid. The short-term coke market may operate temporarily in a stable manner. However, due to the continuous and significant rally in the futures market, a rebound may occur subsequently.

The China Federation of Logistics and Purchasing (CFLP) released the Prosperity Index of China's Logistics Industry for June on the 2nd. As demand continues to improve, logistics business volume maintains expansion, and the prosperity level further increases. The Prosperity Index of China's Logistics Industry for June stood at 50.8%, up 0.2 percentage points MoM.

[SMM Steel Morning Meeting Summary: Spot prices rise, trading volume increases] Yesterday, HRC futures surged strongly, with the most-traded contract closing at 3,191 yuan/mt, representing a daily increase of 2.24%. In the spot market, spot prices rose by 10-40 yuan/mt, and trading volume increased. In terms of supply, the impact from maintenance on hot-rolled coil production this week was 19,600 mt, a decrease of 32,800 mt WoW. Next week, the impact from maintenance on hot-rolled coil production is expected to be 2,800 mt, a decrease of 16,800 mt WoW. The impact from maintenance on hot-rolled coil production has reached its lowest point, further increasing the supply pressure of HRC. In terms of demand, end-use demand from the manufacturing sector remains relatively resilient, but seasonal decline trends have also emerged. On the cost side, according to the SMM survey, under the influence of production control policies, pig iron production decreased by 4,200 mt this week, but still remained at a high level. The support from furnace charge is unlikely to collapse in the short term. Looking ahead, the previous Central Financial and Economic Affairs Commission meeting issued signals on addressing cut-throat competition, enhancing market expectations for the July Central Political Bureau meeting. The pressure on the supply and demand structure may be expected to ease temporarily. In reality, the fundamental contradictions in the HRC market are not yet acute, coupled with moderate cost support. It is expected that the most-traded HRC futures contract will continue to consolidate at a high level in the short term.

Today, HRC futures surged strongly, with the most-traded contract closing at 3,191, representing a daily increase of 2.24%. In the spot market, spot prices rose by 10-40 yuan/mt, with trading volume picking up. In terms of supply, the impact from maintenance on hot-rolled production this week was 19,600 mt, a decrease of 32,800 mt WoW. Next week, the impact from maintenance on hot-rolled production is expected to be 2,800 mt, a decrease of 16,800 mt from this week. The impact from maintenance on hot-rolled production has reached its lowest point, further increasing the supply pressure of HRC. In terms of demand, the end-use demand from the manufacturing sector remains relatively resilient, but signs of seasonal decline are also emerging. On the cost side, according to the SMM survey, under the influence of production control policies, pig iron production decreased by 4,200 mt this week, but still remained at a high level. The support from furnace charge is unlikely to collapse in the short term. Looking ahead, the signal released by the Central Financial and Economic Affairs Commission meeting yesterday regarding addressing cut-throat competition has strengthened market expectations for the July Central Political Bureau meeting. The pressure on the supply and demand structure may be expected to ease temporarily. In reality, the fundamental contradictions in the HRC market are not yet acute, and coupled with moderate cost support, it is anticipated that the most-traded HRC futures contract will continue to consolidate at a high level in the short term.

[SMM Daily Coke Market Briefing] In terms of supply, most coke producers are still operating at a loss. However, excluding the production cuts in the early stage, production has stabilized recently, and there has been no further decline in coke supply. Meanwhile, the shipment situation of coke producers is moderate, and their own coke inventory continues to decline. Demand side, under the influence of production control policies, SMM pig iron output fell by 4,200 mt this week, but it still remained at a high level. There is still a rigid demand for coke, and some steel mills with low inventory are still restocking. In summary, there are fewer contradictions in the coke market fundamentals, and cost support is solid. The coke market may operate steadily in the short term.