This week, the ferrous metals series continued its trend of rising first and then falling. In the first half of the week, news about safety inspections and production restrictions of coking coal and coke led to a sharp increase in coking coal and coke prices, driving a rebound in the ferrous metals series from low levels. In the second half of the week, the market's expectation that new coal mine safety regulations would lead to the closure of small and medium-sized coal mines did not materialize. Coupled with an increase in transaction fees and the expectation that the Dalian Commodity Exchange (DCE) would cool down the coking coal market, the follow-up market trend ended, and the futures market experienced a deep correction. In the spot market, transactions were moderate in the first half of the week, but most were driven by speculative demand for calendar spreads, while end-user demand remained in the off-season...

[SMM Daily Briefing on Coke & Coal] In terms of supply, coke producers' profits have improved somewhat, boosting their production enthusiasm. Coke producers have smooth shipments, and their own coke inventories remain at a low level. On the demand side, steel mills are operating at a high capacity, consuming a large amount of coke. Their own coke inventories continue to pull back, and they have a good enthusiasm for restocking coke. In summary, the supply-demand imbalance in the coke market has not been effectively alleviated. The expectation of environmental protection-driven production restrictions before the military parade has increased, and production at all stages will be subject to certain constraints. After the sixth round of price increases, the coke market may operate steadily for the time being.

[SMM Daily Coke and Coal Briefing] Mainstream steel mills have accepted the sixth round of coke price increases, with the increase ranging from 50-55 yuan/mt or 70-75 yuan/mt, to be implemented from 00:00 on August 14. In terms of supply, coke producers' profits have improved, leading to a slight increase in coke supply. However, due to factors such as environmental protection and military parades, some coke producers have received production restriction notices, and coke supply is expected to tighten. Demand side, blast furnace operations at steel mills remain at a high level, with high daily coke consumption. Additionally, some steel mills have low coke inventory levels and strong purchase willingness. In summary, the tight coke supply situation is difficult to change. Even if the sixth round of coke price increases are implemented and cost support weakens somewhat, coke prices can still maintain temporary stability in the short term.

[SMM Daily Coke Market Briefing] Some steel mills have accepted the sixth round of coke price hikes, with an increase of 50-55 yuan/mt, to be implemented from 0:00 on August 14. In terms of supply, the production cost pressure of coking enterprises has eased recently, and their operating conditions have improved to a certain extent. However, production release remains limited. Additionally, due to the impact of the military parade, coking plants in Shandong have received verbal notifications of environmental protection-driven production restrictions, requiring a 30-50% reduction in production, which will further constrain coke supply. In terms of demand, hot metal production at steel mills has declined slowly but still remains at a relatively high level, maintaining a rigid demand for coke. Some steel mills with low inventory have restocking needs. In summary, as the military parade approaches, the tight supply-demand balance of coke becomes more apparent. The coke market will hold up well in the short term, and the sixth round of coke price hikes is expected to be implemented soon.

SMM Steel reported on August 12 that according to SMM statistics, the estimated total shipments of resources in mainstream markets this week were 331,700 mt, up 18.25% WoW from the previous week's shipment level. By market:

[SMM Daily Coke Market Briefing] In terms of supply, cost pressure persists, with most coke enterprises operating near the break-even point, limiting their capacity for production increases in the future. However, coke sales are smooth, with no sales pressure. On the demand side, steel mills are enjoying good profits, with fewer instances of voluntary maintenance. The decline in hot metal production is slow, and some steel mills have low coke inventories, resulting in moderate enthusiasm for overall coke procurement. In terms of news, market rumors suggest that due to the military parade on September 3rd, some coke enterprises have received verbal notifications of environmental protection-driven production restrictions, requiring a 30%-50% production cut from August 16th to early September. In summary, it is difficult to increase coke supply, and the fundamental situation remains tight. In the short term, the coke market may continue to hold up well, with strong expectations for the sixth round of coke price increases to be implemented.

Last Friday, China's steel export prices surged by $4-10/mt. In the Thai market, import prices for cold-based galvanizing, hot-based galvanizing, and industrial wire rods also increased, with a WoW rise of $5-30/mt. The main reason for the steel price hikes was that the steel varieties circulating in these local Thai markets were mostly from Chinese resources. Therefore, as domestic prices in China surged rapidly, import prices in Thailand also adjusted accordingly. However, according to the SMM survey, although some adjustments in guidance prices stemmed from the significant surge in domestic prices in China, in terms of transaction volumes in the Thai market, the situation was relatively mediocre, with most transaction prices remaining low.

[SMM Daily Briefing on Coal and Coke] In terms of supply, coke enterprises have seen improved profitability, leading to increased production enthusiasm and a slight increase in coke supply. Coke enterprises have smooth shipments, maintaining their coke inventory at a low level. Demand side, steel mills, supported by profits, have maintained moderate production enthusiasm. Hot metal production fluctuates at highs, and there is a rigid demand for coke. Some steel mills with low inventory have been actively procuring coke. In summary, the fundamental situation of coke remains tight. However, prices of some coal types have recently seen a correction, weakening cost support. In the short term, the coke market may hold up well with a slight rise, and the sixth round of coke price increase has been postponed.