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In the domestic ore market in western Liaoning, there is a strong wait-and-see sentiment. The operating rate of ore processing plants is low, and those in operation have a low willingness to sell at low prices, maintaining firm asking prices. The ex-factory price (excluding tax) for 66-grade wet-based ore is 670-680 yuan/mt. Traders and steel mills also exhibit a strong wait-and-see sentiment, with some steel mills expressing pessimism about the future market and a strong desire to bargain down prices. Currently, purchases are mainly made as needed, and overall market transactions are relatively sluggish. Overall, the current tug-of-war between sellers and buyers is evident, and it is expected that the price of local iron ore concentrates will fluctuate in the short term.
Imported Ore:
Yesterday, the Dalian iron ore futures continued to fluctuate rangebound in a strong trend, with the most-traded contract I2509 closing at 736.5, up 0.68% for the day. Traders have a moderate willingness to sell. Steel mills are mainly purchasing as needed, with acceptable inquiries. The market transaction atmosphere is good. In the Shandong region, the mainstream transaction price of PB fines is around 726 yuan/mt, up 2-3 yuan/mt from the previous trading day. In the Tangshan region, the transaction price of PB fines is around 735-740 yuan/mt, up 2-5 yuan/mt from the previous trading day. On July 9, the blast furnace operating rate of 242 steel mills surveyed by SMM was 87.28%, down 0.26 percentage points MoM. The daily average pig iron production of the sampled steel mills was 2.4118 million mt, down 0.19 million mt MoM. Although pig iron production has declined slightly, supported by high profits at steel mills, the extent of production cuts is limited, and there are expectations for production increases next week, keeping iron ore demand at a high level. Additionally, as overseas mines enter the maintenance period in July, shipments have pulled back, further tightening the supply-demand structure of iron ore. The fundamentals continue to support the continuation of the rebound in ore prices.
Coking Coal:
The quoted price for low-sulphur coking coal in Linfen is 1,180 yuan/mt. The quoted price for low-sulphur coking coal in Tangshan is 1,200 yuan/mt. Regarding the fundamentals of raw materials, coal mines are gradually resuming production, and the supply of coking coal will gradually recover. Downstream purchase willingness remains strong, and coal mine inventories have been brought under control. Market sentiment has improved, with prices for some coal types gradually increasing. Overall, coking coal prices are stable, but some coal types that adjusted prices slowly in the early stage are experiencing a catch-up decline.
Coke:
The nationwide average price for first-grade metallurgical coke (dry quenching) is 1,440 yuan/mt. The nationwide average price for quasi-first-grade metallurgical coke (dry quenching) is 1,300 yuan/mt. The nationwide average price for first-grade metallurgical coke (wet quenching) is 1,120 yuan/mt. The nationwide average price for quasi-first-grade metallurgical coke (wet quenching) is 1,030 yuan/mt. In terms of supply, most coking enterprises are operating at a loss, leading to production restrictions and a tightening of coke supply. Coupled with active purchases by downstream entities, coking enterprises continue to reduce inventories. In terms of demand, pig iron production from steel mill blast furnaces remains high, creating a rigid demand for coke. Some steel mills with low inventories have high purchase enthusiasm. In summary, coke supply has tightened, downstream rigid demand still exists, and market sentiment has improved. The short-term coke market may hold up well with a slight rise, and there is a certain expectation for price increases.
Rebar:
Yesterday, rebar futures consolidated and closed at 3063, up 0.07% from the previous trading day. In terms of spot prices, market quotes showed mixed performance, with fluctuations ranging from -20 to 10 yuan/mt, and overall trading performance was average. From the supply side, due to the price push last week, the operating efficiency of short-process steel mills has improved. This week, one electric furnace steel mill resumed production, and two electric furnace steel mills extended their operating hours. The national operating rate of electric furnaces was 33.02%, up 1.16% WoW. The profits of blast furnace steel mills remain considerable, and most maintain normal production rhythms. From the demand side, construction enterprises generally reflect significant financial pressure. Coupled with the landing of Typhoon "Danas" in east and south China, construction progress at construction sites has been slow. The market is in the traditional off-season for demand, and terminal purchasing enthusiasm is weak, with low willingness to stockpile. Agents report that overall shipment conditions are poor. Looking ahead, the supply-demand imbalance in the building materials market is gradually accumulating, and market sentiment is cautious. It is expected that the spot price of building materials will fluctuate in the short term.
HRC:
Yesterday, HRC futures first declined and then rose, with the most-traded contract closing at 3190, a daily increase of 0.09%. In the spot market, spot prices were in the doldrums, with some cities experiencing a slight increase of 10 yuan/mt. Market trading regions were differentiated, with hot trading in south China, moderate trading at low prices in east China, and average trading in north and north-east China. From the fundamental perspective, the impact from HRC maintenance this week was 2,800 mt, a decrease of 16,800 mt from last week. Next week, the impact from HRC maintenance is expected to be 39,900 mt, an increase of 37,100 mt from this week, with production fluctuating at highs. According to the inventory data released by SMM during the day, inventory in the Shanghai area has accumulated slightly, while inventory in Lecong and Ningbo has decreased by varying degrees. After the continuous price increases in the futures market over the past week, the most-traded contract has reached a relatively high level, and the resilience of terminal demand has weakened somewhat. From the cost side, iron ore provides moderate support, and coke holds up well with a slight rise, with a certain expectation for price increases. The cost support is relatively resilient. In summary, before the Political Bureau meeting at month-end, it is expected that the most-traded HRC futures contract will fluctuate at highs within a certain range, with the contract fluctuation range being 3150-3250.
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