[SMM Holiday Review] Ferrous Metals Prices Fluctuated Rangebound on the First Trading Day After the Holiday, with the Market Operating Smoothly During the Double Holiday Period.

During the National Day & Mid-Autumn holiday, the domestic and overseas steel market operated stably. On the first day after the holiday, spot prices of ferrous metals series fluctuated slightly compared to before the holiday. By product category:

Iron ore

Imported ore

During the National Day holiday, while domestic futures were suspended, the most-traded Singapore iron ore swap contract played a "bellwether" role. Influenced by US non-farm payrolls data, expectations for US Fed interest rate cuts increased, leading to a slight rise during the holiday, with the Platts 62% index increasing by $0.3. In terms of spot cargoes, as steel mills had already stockpiled before the holiday, traders mainly took time off, resulting in almost no transactions at domestic ports. On the first trading day after the holiday, the most-traded iron ore futures contract held up well, with spot prices rising 5-10 yuan/mt. Among them, PB fines spot prices at Qingdao port in Shandong mostly quoted around 780-790 yuan/mt. Considering the expectation for post-holiday restocking by steel mills, and the high likelihood of another US Fed interest rate cut in October, along with two important meetings domestically, macro sentiment is positive, and it is expected that short-term iron ore prices will continue to hold up well. In the medium and long term, the supply-demand imbalance of iron ore is gradually accumulating, which will put significant pressure on ore prices.

Domestic ore

Compared to pre-holiday, the comprehensive price of domestic iron ore fines dropped back slightly during the holiday, with regional trends diverging. Affected by the adjustment of the Platts index, prices in east China and Handan and Xingtai regions in Hebei fell 15–20 yuan/mt; whereas prices in Qian'an and Zunhua regions in Hebei, as well as in Liaoning, remained stable with limited fluctuations.

Fundamentally, the supply of domestic iron ore resources remains tight, and blast furnace operations at steel mills are generally stable, with overall fundamentals changing relatively little. It is expected that some steel mills will have restocking needs in the early days after the holiday, potentially boosting the trading sentiment in the domestic iron ore market; however, subsequent trends still need to be monitored based on the overall contraction of steel mill profits. Overall, it is anticipated that domestic iron ore prices may show a slight upward trend in the days following the holiday.

Coke and coking coal

During the National Day holiday, the coke market held up well, with mainstream steel mills in Shandong accepting the first round of coke price increases on October 1st, officially implementing a 50 yuan/mt increase for wet quenched coke and a 55 yuan/mt increase for dry quenched coke. Fundamentally, coke production and supply were normal during the National Day holiday. As both coking coal and coke prices rose, the cost of coking increased, reducing coke enterprise profits and restraining the expansion of coke supply. Additionally, during the holiday, downstream purchasing was active, with most coke enterprises selling as they produced, keeping their coke inventories at low levels. Only in some areas, logistics were affected by the holiday and rainy weather, causing some shipping disruptions. On the raw material coking coal front, most coal mines maintained stable production, while individual mines suspended operations for maintenance, resulting in only a slight overall decline in output, which had limited impact on the market. Downstream coke and steel enterprises showed moderate procurement enthusiasm, and the supply-demand imbalance was not yet pronounced, providing some support for coking coal prices.

Looking ahead, from a fundamental perspective, coke producers maintained moderate production enthusiasm, and coke supply remained relatively stable. However, most steel mills' coke inventories were at safe levels, and finished product inventories accumulated, leading to generally subdued restocking willingness after the holiday. On the raw material side, the coking coal market performed moderately after the holiday, with slight corrections in prices for some high-grade coal varieties, while most coal prices held steady, thus maintaining cost support for coke. In summary, the coke market is expected to operate steadily in the short term, but further price increases for coke after the holiday will face significant challenges.

Construction Steel

During the National Day holiday, national spot prices for construction steel traded within a narrow range, with quotations largely stable in most regions, while individual markets saw fluctuations of 10-20 yuan/mt. On the supply side, blast furnace mills mostly maintained pre-holiday production schedules during the break. Except for some mills where variety steel margins were relatively better, leading to a slight shift in hot metal toward variety steel, construction steel output experienced a minor decline. Additionally, although steel scrap prices declined during the holiday, challenges in scrap collection persisted, and losses at electric furnace mills improved only marginally, prompting them to maintain production rhythms focused on off-peak electricity usage in the short term. Inventory-wise, most merchants took 3-4 days off during the holiday, while some arranged for staff to work on other statutory holidays. However, downstream construction sites were largely semi-idle during the break, with slow progress and relatively limited procurement volumes. Arrivals at markets were normal during the holiday, leading to noticeable accumulation in both producer's warehouses and social inventories. Some resources in producer's warehouses had not yet been transferred to the market, resulting in a faster accumulation rate at producer's warehouses compared to social inventories.

Looking ahead, price trends may diverge across regions. Specifically, continued heavy rainfall in southern and northern China may still constrain demand release in the first week after the holiday, making it difficult to quickly alleviate inventory pressure and leading to relatively weak stability in spot prices. However, regions such as east China and southwest China may see significant restocking demand from downstream sectors after the holiday. Previously, downstream players adopted a cautious wait-and-see attitude toward the market outlook and basically stocked up as needed before the holiday. As end-users resume normal construction activities after the holiday, this pent-up demand is expected to be gradually released, potentially driving inventory drawdowns and providing some support to the bottom of spot prices. Overall, short-term construction steel prices still have some upside potential, but medium and long-term performance will depend on the realization of demand during the October peak season.

Sheets & Plates

During the National Day & Mid-Autumn Festival holiday, HRC prices in major national markets remained stable.

On the first trading day after the holiday, in the east China market, quotations in Shanghai and Zhangjiagang edged up slightly by 10-20 yuan/mt compared to pre-holiday levels. However, inquiry activity in the market was weak, and end-users showed a strong wait-and-see attitude. In the Ningbo market, spot prices at the tail end of today were quoted at 3,360-3,370 yuan/mt, up 10-20 yuan/mt from pre-holiday levels. Traders actively sold goods, but the market trading atmosphere was moderate, with some end-users showing average purchasing enthusiasm.

In the south China market, on the 9th, offers in the Lecong market were 3,330-3,340 yuan/mt, up 10 yuan/mt from pre-holiday levels. Overall trading conditions were moderate, with some end-users conducting restocking; most traders were on holiday during the break, and sales performance was average.

In the northern market, on the 9th, overall trading performance of hot-rolled coil (HRC) in mainstream northern markets was average. Among them, spot offers in the Tangshan market were 3,300 yuan/mt, up 20 yuan/mt from pre-holiday levels, with a moderate trading atmosphere and average downstream purchasing initiative; offers in the Shenyang market were 3,320 yuan/mt, up 20 yuan/mt from pre-holiday levels, and HRC trading performance was average.

In the cold-rolled market, on the 9th, Bensteel Group's cold-rolled DC01 1.0 in Shanghai was quoted at 3,830 yuan/mt, down slightly by 10 yuan/mt from pre-holiday levels. Market prices fluctuated relatively little compared to pre-holiday, trading was average, with no significant improvement.

Looking ahead, on the first day after the holiday, the social inventory of HRC in 86 warehouses nationwide (large sample) as surveyed by SMM totaled 4.0965 million mt, up 457,900 mt MoM, an increase of 12.58% MoM, and down 5.45% YoY. By region, south China and north China saw the largest accumulations, both exceeding 15%, while east China, central China, and north-east China had accumulations below 10%. Social inventory accumulated significantly nationwide during the holiday, with the accumulation rate higher than the same period last year, and inventory levels approaching last year's. Attention will be paid to the start of demand and inventory destocking speed in the first one to two weeks after the holiday. In the short term, HRC prices are expected to fluctuate within a weak range, with focus on the most-traded contract range of 3,230-3,330 yuan.

Export and Overseas Markets

During China's National Day holiday, most domestic export traders were on holiday and stopped offering quotes. Today is the first working day after the holiday. In terms of export offers, FOB prices for sheets & plates remained stable compared to pre-holiday levels, while long product prices saw a slight decrease MoM. In terms of export order-taking, market inquiries were not active today, and overall trading was weak.

Regarding the new income tax payment announcement effective from October 1, which had attracted widespread attention previously, according to SMM surveys, there have been no new implementation progress reports at northern ports currently. MD quotes seem to be emerging again, while southern ports continue to mainly handle tax-included exports due to more complicated procedures. SMM will continue to monitor further developments.

On October 7, the EU officially announced the strictest steel import ban in history, reducing the duty-free import quota to 18.3 million mt per year, down 47% from 2024; the tariff rate for excess steel import products increased from 25% to 50%; simultaneously, new traceability requirements for origin (smelting and pouring) were added. The bill aims to replace the steel safeguard measures set to expire in June 2026 and may be implemented by July 1, 2026, at the latest. While the actual impact cannot be estimated for now, barriers facing Chinese steel products exported to the EU are expected to increase.

In major global markets, Chinese traders maintained stable export offers. During the National Day holiday, market sales enthusiasm was weak. Indian market sentiment remained sluggish, with weak demand for finished products. Due to the impact of the Dussehra holiday (October 2), trader procurement activities slowed down, and steel prices remained in the doldrums. Russia's Ministry of Finance postponed tax payment deadlines for metallurgical enterprises, including the indexation of the steel excise tax and an increase in its zero threshold, as well as exempting electric furnace metallurgical enterprises from this tax. Steel prices temporarily stabilized, with expectations of future increases. Southeast Asian prices followed fluctuations in the Chinese market, with pre-holiday declines being slightly larger, falling by $3–5/mt, and market transactions were weak. Japan's Daiwa Steel plans to upgrade its section steel rolling mill, expected to be completed by summer 2028. Market traders, considering the short-term supply contraction due to equipment upgrades, have slightly raised steel prices. The European Commission has confirmed a proposal to halve quotas and impose a 50% tariff, leading to rising import prices. Due to increased barrier risks, imported resources have sharply decreased.

Overview of Important Holiday News

[EU Plans to Impose 50% Tariff on Extra-Quota Steel Imports]

On the 7th, the EU announced steel import restriction measures, proposing to significantly reduce the quota for steel imports eligible for tariff exemptions and raising the steel tariff from 25% to 50%. According to the announcement issued by the European Commission that day, the EU plans to set the annual steel import quota at 18.3 million mt, a 47% reduction compared to the 2024 steel import quota. For steel imports beyond the quota, the EU intends to impose a 50% tariff, doubling the current 25% tariff. The announcement also indicated that the EU will take measures to strengthen origin tracing for melted and cast steel products to prevent so-called "circumvention" practices. The announcement stated that the EU's move aims to address the negative impacts of global steel overcapacity and ensure the long-term development of the EU steel industry as a strategic sector. According to the EU agenda, after the European Commission announced the restriction measures on the 7th, the European Parliament and the Council of the EU will conduct reviews. If approved, these measures will take effect after the current EU measures expire in June 2026.

[BHP Accepts Yuan Settlement Requirement!]

In October 2025, BHP accepted the yuan settlement requirement for some iron ore trades with Chinese customers. This resulted from China's concentrated procurement strategy and market forces, marking a breakthrough for the yuan in commodity settlement. BHP, after multiple rounds of negotiations with China Mineral Resources Group (CMRG) and related steel enterprises, officially implemented yuan-denominated settlements starting in Q4 2025. The scope of coverage includes: Remaining spot cargoes: accounting for approximately 30% of BHP's total iron ore exports to China (long-term contracts continue to be priced in US dollars, but an "observation period" has been established; if the market acceptance of China's iron ore index, such as the Northern Iron Ore Index, meets the standard by 2026, negotiations for yuan-denominated settlements of long-term contracts may be initiated); Port spot cargoes and CFR transactions: for spot iron ore at Chinese ports, yuan-denominated CFR settlements are adopted, mitigating the impact of US dollar exchange rate fluctuations on enterprise costs.

[EU to Cut Import Quotas for Flat Products by 8.5 Million mt]

On October 7, the EU announced it would reduce import quotas for flat products by 8.5 million mt. The import cap for hot-rolled coil (HRC) will be 5.2 million mt, the quota for cold-rolled coil will be 1.5 million mt per year, and the quota for hot-dip galvanized products will be 2.85 million mt per year. Quotas will be allocated quarterly, with unused amounts not carried over. All countries, including Ukraine, will be subject to the new measures, meaning any imports exceeding these levels will face a 50% tariff, although the tariff will still be calculated proportionally at the start of the new quota period.

[Six Departments Jointly Issue the "Work Plan for Stabilizing Growth in the Machinery Industry (2025-2026)"]

Recently, six departments including the Ministry of Industry and Information Technology jointly issued the "Work Plan for Stabilizing Growth in the Machinery Industry (2025-2026)". It proposes that the average annual revenue growth rate of the machinery industry should reach around 3.5% during 2025-2026, with revenues exceeding 10 trillion yuan by 2026, and aims to cultivate a number of competitive characteristic industrial clusters of small and medium-sized enterprises and internationally competitive industrial clusters.

[Loudi, Hunan to Add a 5 Billion Yuan Silicon Steel Project]

Loudi, Hunan, aiming to build a "Material Valley" in central China and focusing on the "three steels, three electricals, and one titanium" industry chain, has attracted over 80 projects each with investment exceeding 100 million yuan, totaling 36.839 billion yuan in investment. Local enterprises' technological transformation and expansion investments exceeded 10 billion yuan, with Hongwang Group adding a 5 billion yuan silicon steel and titanium materials industry chain project. Since the beginning of this year, Loudi City has thoroughly implemented the decisions and deployments of the CPC Central Committee and the State Council on promoting the development of the private economy. Through three core measures—policy empowerment, industrial concentration, and service efficiency enhancement—the city has promoted high-quality development of private investment. From January to August, the city's private investment grew by 9.1%, with the growth rate ranking among the top in the province, and five enterprises from Loudi were listed among China's Top 500 Private Enterprises.

[Fatal Accident at Winning Consortium Simandou (WCS) Iron Ore Project in Simandou, Guinea]

A fatal accident occurred at Blocks 1 and 2 of the Winning Consortium Simandou (WCS) iron ore project in Simandou, Guinea, resulting in the deaths of three foreign workers. The project has suspended operations and initiated a comprehensive safety review. This is the second work stoppage at the Simandou mine due to an accident in less than two months.

[Hainan: Suspension of Hainan Province's 2025 Vehicle Replacement and Renewal Subsidy Policy Effective October 6]

The Hainan Provincial Department of Commerce issued an "Announcement on Further Adjusting Relevant Matters of the 2025 Trade-in Policy for Consumer Goods in the Commercial Sector" on October 4. The announcement stated that the 2025 Hainan Province Vehicle Replacement and Renewal Subsidy Policy will be suspended starting from 00:00 on October 6, 2025. Consumers whose new vehicle "Motor Vehicle Sales Uniform Invoice" was issued before 00:00 on October 6, 2025, can apply for the subsidy as normal; subsidy applications for invoices issued on or after 00:00 October 6 will no longer be accepted. Eligible consumers should submit their applications and upload the required documents via the "2025 Hainan Province Vehicle Replacement and Renewal Subsidy Application Platform" before 24:00 on October 31, 2025; any supplementary information must be completed by 24:00 on November 15, 2025. Failure to submit or supplement information by the deadline will be deemed an automatic waiver of the subsidy eligibility. The announcement stated that subsidies for products such as home appliances, home furnishings, mobile phones, and digital products will continue to be implemented according to the current policy. The vehicle retirement and renewal, and e-bike trade-in subsidy policies remain unchanged.

[Vietnam's Capital Hanoi Paralyzed by Heavy Rain Again Within Two Weeks, Triggering Flood Warnings in Multiple Areas]

Vietnam's national meteorological agency has issued flash flood warnings for 13 provinces, including Thanh Hoa, Hai Phong, and Bac Ninh. Among them, Bac Ninh is an important manufacturing hub for global electronics suppliers that produce products for companies like Apple and Samsung Electronics. This storm comes one week after Typhoon Bualoi swept through northern Vietnam, causing at least 56 deaths and estimated economic losses of 18.8 trillion Vietnamese dong. Bualoi was the 10th tropical storm to make landfall in Vietnam this year. The meteorological agency predicts that up to four typhoons or tropical depression systems may enter the South China Sea before the end of the year, with one or two potentially affecting Vietnam.

[Egypt Launches New Incentive Plan to Support the Steel Industry]

Egypt's Ministry of Industry announced the launch of a new incentive package to revitalize industrial growth, with a focus on supporting strategic steel enterprises. The plan includes priority access to competitively priced industrial land, flexible payment terms, loans for working capital and production lines, 24-hour fast-track licensing, and accelerated provision of supporting infrastructure. The Egyptian government aims to reduce import dependency, expand domestic capacity, and establish Egypt as a regional steel export hub. The incentive program offers a series of preferential policies designed to attract and retain industrial investors.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database model, and are for reference only, not constituting decision-making advice.

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