This week, the ferrous metals series saw a high-level correction. At the beginning of the week, the market was abuzz with news that blast furnaces in Tangshan would be subject to 40% production restrictions by capacity at the end of August, leading to a pullback in raw material prices. Although a decline in production is beneficial for finished products, the collapse of cost support pushed these products to their lowest levels in nearly a month. In the latter half of the week, rumors circulated about stricter enforcement of order inspections, and actions were already being taken at southern ports, resulting in a more pronounced drop in HRC compared to rebar, narrowing the spread between the two. In the spot market, when the spot-futures price spread narrowed, there was still speculative demand for long positions, but the hot and rainy weather suppressed the recovery of end-use demand...

According to the SMM survey, the large-caliber inventory of SMM Ningbo HRC this week was 345,200 mt (as of August 20), with a WoW increase of 45,700 mt.This week, HRC prices fluctuated downward, with weekly spot price declines of 30-80 yuan/mt. The market trading atmosphere was poor during the week, with downstream end-users mainly adopting a wait-and-see approach. As of the afternoon close on August 22, the most-traded HRC 2510 futures contract closed at 3,361 yuan/mt.

[SMM daily coke and coal review] In terms of news, major steel mills in Hebei and Shandong accepted the seventh round of coke price increases by 50-55 yuan/mt. In terms of supply, coking enterprises' profits expanded, boosting production enthusiasm, but due to production restrictions related to the military parade, supply is unlikely to increase significantly. Coking companies are shipping smoothly, with relatively small inventory pressure. On the demand side, the production restriction dates for steel mills in Tangshan have been set, which may lead to a decrease in coke demand. However, as steel mill profits remain moderate and hot metal production is declining slowly, there is still a rigid demand for coke. Overall, with limited potential for a significant increase in coke supply and downstream steel mills needing to restock coke, the short-term coke market is expected to be generally stable with slight rise.

Based on data compiled by SMM from the General Administration of Customs, in terms of export destinations, Indonesia ranked first in the cumulative total steel billet export volume from January to July 2025, with a total of 1.154 million mt, accounting for 15% of the total steel billet export volume. The Philippines followed with an export volume of 988,600 mt, accounting for 13% of the total. Turkey ranked third with 646,400 mt, accounting for 9% of the total.

[SMM Daily Coke Review] In terms of supply, coking enterprises' profits have been somewhat restored, and production enthusiasm has slightly increased, leading to an increase in supply. Coking companies are shipping smoothly, with overall inventory pressure being relatively small. On the demand side, the production restriction dates for steel mills in the Tangshan area have been set, which may lead to a decrease in coke demand. However, as steel mill profits remain moderate and hot metal production is declining slowly, there is still some support for coke demand. In summary, due to the constraints of production restrictions related to the military parade, it is difficult for coke supply to see a significant increase. Downstream steel mills are purchasing coke as needed, and the coke market is expected to operate stably in the short term.

[SMM Daily Coke Review] In terms of supply, affected by the environmental protection policy, coke enterprises have received production restrictions, and subsequent coke supply will further tighten. Moreover, the inventory of coke at these enterprises remains consistently low, making it difficult for short-term coke supply to improve. On the demand side, the arrival situation of coke at steel mills is gradually improving. Additionally, some steel mills in Tangshan have been notified to restrict blast furnace capacity by 30%-40% from August 31 to September 3, leading to an expectation of reduced rigid demand for coke from steel mills. In summary, the intensity of recent environmental protection-driven production restrictions continues to increase. Apart from coke enterprise production restrictions, steel mills are also expected to implement production restrictions soon. The tight supply and demand pattern for coke may change, and in the short term, the coke market is likely to hold up well with a slight rise. However, it will be challenging for the seventh round of coke price increases to materialize.

SMM Steel, August 19 - According to SMM statistics, the estimated total resource shipments for mainstream markets this week were 270,100 mt, down 18.57% WoW from last week's shipping levels. By market:

The most-traded HRC futures contract fluctuated rangebound today, closing at 3,416, down 0.38% at the end of the session. Supply side, the impact from maintenance on HRC was 212,000 mt this week, up 64,500 mt WoW, and is expected to be 258,000 mt next week, up 46,000 mt WoW from this week, indicating a slight decrease in HRC supply. Demand side, high temperatures and frequent rain have significantly affected the recovery of end-use demand, with no clear signs of a complete exit from the off-season yet. Raw material, increased maintenance due to environmental protection-driven production restrictions in the north by month-end may lead to a downward trend in hot metal, weakening short-term cost support. Overall, expectations for reduced supply in finished products may increase. Continued attention should be paid to SMM maintenance data. If production restrictions in the north continue to rise, it could reinforce the "supply reduction" logic, potentially leading to a modest price increase in finished products, but with limited upside. It is recommended to mainly adopt a strategy of selling on rallies.

[SMM Daily Coke and Coal Review] In terms of supply, coking enterprises' profits improved, boosting production enthusiasm. Coking companies actively shipped goods, with coke inventory remaining at a low level. On the demand side, steel mill profits were good, but an increase in blast furnace maintenance led to a decrease in rigid demand for coke. Overall, affected by production restrictions due to the military parade, both coking enterprises and steel mills faced subsequent production restrictions, alleviating the supply-demand imbalance in the coke market. In the short term, the coke market may stabilize, and the difficulty of implementing the seventh round of price increases has increased.