This week, the ferrous metals series first rose then fell, with some varieties reaching half-year highs before experiencing significant declines. On the news front, Tuesday saw market sentiment peak as expectations for the upcoming Politburo meeting combined with potential production cut expectations in September due to military parade supply constraints, driving stronger gains in finished products than raw materials. Later in the week, the Politburo meeting concluded without exceeding expectations regarding real estate or anti-"rat race" competition measures, prompting increased exits by bulls. Fundamentally, the third and fourth rounds of coke price increases materialized this week, while finished product inventories began accumulating. Spot market-wise, recent trading activity declined, with arbitrage demand still entering early in the week but transactions plummeting later...

[SMM Daily Briefing on Coking Coal and Coke] In terms of news, steel mills have not accepted the fifth round of price hikes this week and plan to make a decision next week based on market conditions. In terms of supply, the cost of coal fed into the blast furnace continues to squeeze the profits of coke enterprises, resulting in generally average production enthusiasm. Coke production has recovered slightly, with smooth shipments and low inventory levels. In terms of demand, steel mills have good profitability and maintain high production enthusiasm. However, due to the impact of heavy rainfall, transportation has been hindered, and the arrival of coke at steel mills has slowed down somewhat, with steel mills actively purchasing coke. In summary, the fundamental situation of coke remains tight, and the coke market will generally be stable with a slight rise in the short term.

President Trump has issued a new executive order imposing reciprocal tariffs on imports from key trading partners, with a 10% baseline duty taking effect seven days after the order for non-compliant nations. The order establishes a minimum 15% tariff on EU goods where current duties fall below that threshold, while maintaining previously announced 50% tariffs on Brazil starting August 6 and potentially increasing China tariffs from 30% to 54%. Goods already in transit will be exempt from new duties if entered by October 5, 2025, with energy commodities remaining duty-free. The order introduces strict anti-circumvention measures including 40% punitive tariffs on transshipped goods and requires biannual publication of circumvention-prone entities. The Commerce Department, DHS and USTR will lead implementation, monitoring the national emergency declared in April 2025 regarding trade deficits. The policy aims to pressure trading partners into fairer agreements while protecting U.S. industries, though it may lead to higher consumer prices. Countries finalizing trade deals with the U.S. may avoid the tariff increases.

[SMM Daily Coke Market Briefing] In terms of news, steel mills have not accepted the fifth round of price hikes this week and plan to make a decision next week based on market conditions. In terms of supply, the profitability of coke enterprises has improved, but due to high coking costs, most have maintained their previous production levels and have no obvious intention to increase production. Meanwhile, coke enterprises have smooth shipments and their own inventories are at a low level. In terms of demand, steel mills have good profits and moderate production levels. Additionally, due to recent heavy rains, transportation in some areas has been restricted, leading to poor delivery to steel mills and active procurement. In summary, the fundamentals of the coke market remain tight, and with cost support still in place, the coke market may operate generally stable with slight rise in the short term.

[SMM Daily Review of Coking Coal and Coke] In terms of supply, after four consecutive rounds of coke price increases, the losses of coking enterprises have improved to some extent. However, there is still room for coking coal prices to rise, which restricts the production increase of coking enterprises. Demand side, currently, steel mill profits are at a relatively high level, and hot metal production remains high. Moreover, the arrival of coke at steel mills is generally average, leading to active procurement of coke. In summary, the supply of coke is relatively tight, and the short-term coke market may continue to hold up well, with expectations for a fifth round of price increases.

According to SMM data, the weekly average domestic HRC production in July was 4.1199 million mt, which was lower compared to the same period last year, and rose slightly by 0.8% MoM from June.

SMM Steel reported on July 29 that according to SMM statistics, the estimated total shipments of resources in major markets this week were 276,600 mt, representing a 27.66% increase in shipment levels compared to last week. By market:

[SMM Daily Coke and Coking Coal Review] Mainstream steel mills in Hebei and Shandong officially accepted the fourth round of coke price increases of 50-55 yuan/mt, while mainstream coking enterprises initiated the fifth round of coke price increases. In terms of supply, coking enterprises' profits have improved again, but production levels remain low. Additionally, downstream steel mills and traders are actively purchasing, and coking enterprises' shipments are smooth. Demand side, supported by profits, steel mills' hot metal production continues to fluctuate at highs, with weak expectations for production cuts, indicating a rigid demand for coke. In summary, the overall supply of coke is tight, and the coke market will continue to hold up well in the short term.

According to SMM data, as of July 24, the average SMM price spread between cold-rolled and hot-rolled steel for this month was 382 yuan/mt, remaining stable MoM from the June average. Since Q2, the price spread between cold-rolled and hot-rolled steel has continued to narrow.

[SMM Daily Coke Market Brief] Some steel mills in Hebei and Shandong have already accepted the fourth round of coke price hikes of 50-55 yuan/mt. In terms of supply, due to the high production costs, the production enthusiasm of coke enterprises is limited, and some coke enterprises continue to face production restrictions, with limited room for production increases. Demand side, steel mills maintain a relatively high production level, creating a rigid demand for coke. Additionally, traders divert some of the coke supply, resulting in average deliveries to steel mills. However, steel mills remain active in coke procurement. In summary, the fundamental situation of coke is tight, coupled with strong cost support for coke. In the short term, the coke market may continue to hold up well, with expectations for a fourth round of coke price hikes.