[SMM Steel Morning Meeting Summary] The impact of "anti-cut-throat competition" news fades, and finished steel prices are under pressure

Domestic ore:

Shandong mines and beneficiation plants offered 64-grade alkaline concentrate at 786 yuan/mt (dry basis, tax-included, ex-mine), up 9 yuan WoW. Steel mills followed suit with price hikes. Most mines operated normally, while a few underwent maintenance, which had no significant impact on overall supply. Although steel mills maintained low inventory levels, their purchase willingness was strong. Large mines were basically out of stock, while small plants and traders reported good sales. The weekly transaction volume was moderate. According to SMM tracking, the flow of iron ore concentrates to Hebei increased recently, with overall market demand remaining moderate. Coupled with the slight rise in imported ore prices, this may boost local market sentiment, leaving room for minor price increases.

Imported ore:

DCE iron ore futures fell back from highs yesterday, trading in the doldrums throughout the day. The most-traded contract I2509 finally closed at 731, down 0.68% for the day. Traders sold at market prices. Steel mills adopted a cautious wait-and-see approach with weak purchase willingness. Market transaction sentiment was moderate. In Shandong, mainstream transaction prices for PB fines stood at 720-723 yuan/mt, down 2 yuan/mt from last Friday's highs. In Tangshan, PB fines traded at 730-735 yuan/mt, down 2-5 yuan/mt WoW. SMM shipping data showed that ore shipments plunged after mines completed their quarter-end push for targets, easing short-term supply pressure. However, market sentiment was disturbed by the impending expiration of tariff exemptions, putting downward pressure on futures prices. The iron ore market currently shows weak supply and demand, with price fluctuations mainly driven by policy expectations. Short-term focus remains on tariff policy developments and the impact of July's key meetings.

Coking coal:

Low-sulphur coking coal in Linfen was offered at 1,180 yuan/mt, while Tangshan quoted 1,200 yuan/mt. Fundamentally, coal mines maintained normal production, though some mines in certain regions implemented production cuts. Recent improvements in coal mine shipments led to declining inventory, with better online auction performance and lower bid failure rates. Market transaction sentiment improved, keeping short-term coking coal prices stable, while some oversold grades may rebound.

Coke:

The nationwide average price for first-grade metallurgical coke (dry-quenched) was 1,440 yuan/mt, while quasi-first-grade (dry-quenched) stood at 1,300 yuan/mt. First-grade (wet-quenched) averaged 1,120 yuan/mt, and quasi-first-grade (wet-quenched) was 1,030 yuan/mt. Supply side, coking plants still faced losses, with previously production-cut plants lacking motivation to resume operations. Coke supply remained stably low. Recent increases in buyer purchases helped coking plants reduce inventory, easing sales pressure. Demand side, pig iron production of steel mill blast furnaces declined due to the off-season, with mills purchasing as needed. In summary, the fundamentals of coke are approaching equilibrium, with stable cost support. Coke prices may remain stable in the short term. However, on July 9th, the US reignited global tariff conflicts, which may impact the coke futures market and weaken expectations for a rise in spot coke prices.

Rebar:

Yesterday, the futures market was in the doldrums, closing at 3061, down 0.68% from the previous trading day. In the spot market, most market quotes dropped slightly, with declines of 10-40 yuan/mt, and overall trading was sluggish throughout the day. On the supply side, most blast furnace steel mills maintained profits above 100 yuan/mt, and steel mills' production willingness was moderate. EAF steel mills faced difficulties in collecting scrap and were mostly in a state of loss, with electric furnace operating rates remaining at a low level, and overall supply changes were relatively small. On the demand side, high temperatures persisted in many regions, leading to staggered adjustments in outdoor operation times for downstream end-users. The market was in the traditional off-season for demand, and most regions reported mediocre performance in spot trading. Overall, the contradictions in the fundamentals of building materials are gradually accumulating. With the fading impact of positive news such as "anti-cut-throat competition," it is expected that building material prices may oscillate weakly in the short term.

HRC:

Yesterday, HRC futures were in the doldrums, with the most-traded contract closing at 3191, a daily decline of 0.62%. In the spot market, spot prices dropped slightly by 10 yuan/mt, with a weak trading atmosphere. The overall daily trading volume continued to pull back from Friday, and end-user purchase willingness was poor. From an overseas news perspective, Malaysia imposed temporary anti-dumping duties on galvanized steel coils/sheets originating or exported from China, South Korea, and Vietnam. The Ministry of Industry and Trade of Vietnam imposed final anti-dumping duties on certain hot-rolled steel products originating from the People's Republic of China and terminated the anti-dumping investigation on certain hot-rolled steel products originating from the Republic of India. On the fundamentals side, the impact from HRC maintenance this week was relatively small, and supply pressure continued to increase. From market feedback, after a continuous rise in the most-traded futures contract last week, it has reached a relatively high level, and the resilience of end-use demand is gradually weakening. In the short term, market focus should still be on the impact of Trump's new tariff rates and domestic anti-cut-throat competition governance on market sentiment, as well as the impact on export sentiment following the recent announcement of anti-dumping measures. Overall, it is expected that the most-traded HRC futures will oscillate weakly in the short term, with a contract fluctuation range of 3150-3250.