[SMM Daily Coal and Coke Briefing] Supply side, coke producers' profits have declined significantly recently, but operating rates remain at normal levels. Coupled with moderate purchasing enthusiasm from downstream buyers, coke producers are shipping smoothly with no inventory pressure for now. Demand side, as the National Day holiday approaches, steel mills' purchasing enthusiasm has increased somewhat. However, current coke inventory at steel mills is already at reasonable levels, and finished steel prices continue to fluctuate, resulting in low acceptance of coke price hikes by steel mills. In summary, upward momentum for coke prices is still building, and the coke market may remain stable in the short term.

This week, the ferrous metals series initially rose before weakening and stabilizing in the doldrums. HRC, constrained by fundamental pressures, performed worse than other varieties. The key turning point this week was the US Fed's interest rate cut. In the first half of the week, before the rate cut was implemented, macro expectations remained, coupled with rumors of a halt in Xinjiang thermal coal production, leading to a relatively strong overall performance in the ferrous metals series. In the latter half of the week, the US Fed cut interest rates by 25 basis points, with no surprises, prompting some capital to exit. From the fundamentals of finished products, rebar showed a short-term inventory turning point, while HRC inventory continued to accumulate. Under fundamental pressure, HRC's performance remained weak.

[SMM Daily Coking Coal and Coke Brief] Supply side, with two rounds of coke price cuts implemented and coking coal prices rebounding, coke producers' profit margins have significantly narrowed. However, production remains at normal levels, and coke supply is relatively stable. Additionally, as coke producers are shipping smoothly, there is no significant inventory pressure for now. Demand side, high hot metal production supports coke demand, and steel mills still have restocking needs for coke. In summary, futures market sentiment has pulled back, but cost support for coke has strengthened. Coupled with expectations of pre-National Day restocking by downstream users, the coke market is expected to remain stable in the short term.

According to the SMM survey, the SMM Ningbo HRC large-port statistical inventory stood at 383,500 mt as of September 17, up 4,000 mt WoW. This week, HRC prices first rose then fell, with spot prices fluctuating rangebound by 10-20 yuan/mt WoW. Trading atmosphere was moderate during the week, with end-users purchasing as needed and showing relatively low restocking willingness. As of the afternoon close on September 19, the most-traded HRC 2601 futures contract settled at 3,374 yuan/mt.

[SMM Daily Coking Coal and Coke Brief] Supply side, most coke enterprises are not operating at a loss, with stable production, but some continue to see an increasing trend in coke inventory. Demand side, downstream steel mills have resumed production effectively, with hot metal output continuing to rebound, creating rigid demand for coke. Overall, cost support for coke has strengthened, and the easing of production restrictions on coke enterprises in the Tangshan area has weakened market expectations of a coke price decline, boosting overall market sentiment. In the short term, the coke market is expected to remain stable.

The Southeast Asian steel industry stands at a critical historical juncture. On one hand, the region is experiencing an unprecedented wave of capacity expansion, with Chinese capital-driven investments planning to add over 100 million mt of new capacity, and a duopoly between Vietnam and Indonesia has already taken shape. On the other hand, the EU carbon border tax and global decarbonization requirements are compelling industry to undergo a green transformation, posing severe challenges to traditional development models. Key trends indicate that a capacity race and green transformation are advancing in tandem; regional supply chains are being restructured, with self-sufficiency rates increasing, yet high-end products still rely on imports; national infrastructure projects provide solid support for demand, but the risk of overcapacity cannot be ignored. The key to future competition lies in balancing scale expansion with quality improvement, traditional capacity with green transformation, and short-term gains with long-term sustainability. Enterprises that can achieve breakthroughs in low-carbon technologies, product structures, and market positioning will take the lead in the next round of industrial reshuffling. The major transformation in Southeast Asia's steel industry is not only reshaping the regional industrial landscape but also profoundly impact global steel trade and supply chains.

[SMM Daily Coking Coal and Coke Brief] Supply side, coking plants still maintain certain profits with stable production levels and sufficient coke supply. However, Tangshan issued emission reduction measures requiring a 30% extension of coking time, leading to reduced regional supply. Demand side, steel mill profits are moderate, and blast furnace operations remain at high levels, but purchase willingness from mills is weak. Additionally, Tangshan received an emission reduction notice requiring some steel mills to implement production cuts within a specified period, further suppressing coke demand. Overall, coke fundamentals have improved slightly. Coupled with pre-National Day restocking expectations and stable cost support, the coke market is expected to remain steady in the short term.