Forecast for Next Week: Ferrous Metals to Remain Consolidating Near the Bottom in the Short Term
This week, ferrous metals declined continuously. During the week, while unverified rumors caused some disruptions, overall macro sentiment was weak, with expectations for rate hikes outside China continuing to pressure commodity sentiment. Iron ore briefly rebounded on rumors of a BHP strike. In the latter half of the week, Tangshan issued a notice on the "Tangshan 2026 H2 Industrial Source Emissions Reduction Plan," which, combined with post-holiday inventory buildups across the five major steel products, weighed on market sentiment, causing ferrous metals to fall again. In the spot market, the off-season characteristics of end-use demand became increasingly evident, with market demand continuing to weaken. While spot prices remained relatively firm, the spot-futures price spread widened, leading to the unwinding of physical resources at below-market prices, which further pushed down market prices.
In the short term, the SMM survey tracked that daily average hot metal production fell by 4,300 mt WoW this week. Hot metal output peaked and pulled back, and it is expected to continue declining amid narrowing margins and more stringent environmental protection measures. The ninth round of coke price increases has a probability of being implemented. The cost side saw both increases and decreases, making the cost center unclear in the short term. For steel, under the influence of a rainy season, demand for construction steel weakened significantly, and demand for sheets & plates also showed off-season characteristics. On the export front, demand in some ex-China markets was somewhat boosted by the reopening of the Strait of Hormuz, with an increase in inquiries and deals, which could be a supporting factor. Overall, the weakening cost support, coupled with the materializing reality of weak finished product demand, suggests ferrous metals will likely continue to consolidate near the bottom in the short term. Future focus will be on the sustainability of demand outside China to judge whether it can provide a floor, and on the progress of coal mine production resumptions in Shanxi.
Iron Ore: Repeated Fluctuations Driven by News; Prices Expected to Move Sideways Next Week
Iron ore prices fluctuated repeatedly this week, generally struggling to rebound and hitting new lows. Frequent news-driven disruptions during the week caused the volatile prices. Looking ahead to next week, if the ninth round of coke price increases is successfully implemented, steel mill losses will widen further. Combined with weak end-use demand during the off-season and climbing in-factory inventory pressure, hot metal production is expected to continue pulling back, further weakening demand support for iron ore. In terms of supply, driven by a push for target at quarter-end, global shipments are likely to maintain their upward momentum, and port inventories face the risk of further accumulation. Additionally, if crude oil prices continue to decline, this will further weaken cost-side support for ore prices. Overall, imported ore prices are clearly under pressure, and are expected to weaken again, moving sideways.
Coke: Market Likely to be Generally Stable with Slight Rise; Ninth Round of Increases Still Expected
Supply side, coking enterprises still face cost pressure, restricting production enthusiasm. Currently, most coke producers maintain previous production restriction levels, while their shipment pace is relatively fast, keeping inventories low. Demand side, there is a slight reduction expected in steel mill hot metal output. Steel mills remain eager to purchase coke, but the finished steel market is in the off-season, with steel mill profitability still poor. Additionally, Tangshan issued emission reduction and production cut policies, dealing a blow to rigid coke demand. Coking coal side, the resumption pace of suspended mines in Shanxi remains slow. There are market rumors that all mines in a certain region will undergo complete closures starting from the 29th, keeping coking coal output still low. Recent online auctions saw most deals at starting prices, with limited premium for coking coal, and the failure rate rose markedly. Prices of some high-priced coal grades began to ease. However, with the ninth round of coke price increases initiated, some market participants are relatively calm, and mines are willing to hold prices firm. In summary, the short-term coke market may stay generally stable with slight strength, and the ninth coke price increase still has expectations of materializing.
Steel scrap: fundamentals show a tight balance, and prices may consolidate at lows.
Supply side, some areas in south China were affected by rainfall, causing a slight decline in steel scrap processing volumes. Demand side, end-user demand for steel products is gradually entering the off-season, and steel prices are under pressure. Blast furnace steel mills are relatively cautious in purchasing steel scrap, considering cost factors. Moreover, due to the low cost-effectiveness of steel scrap, mills' enthusiasm for using scrap is mediocre, and some mills reduced scrap usage. EAF steel mills see per-ton steel margins mostly near the break-even line, and some electric furnace plants have successively cut operating hours, leading to lower scrap demand. Overall, the steel scrap fundamentals showed a tight balance. Short-term scrap prices are expected to consolidate at lows.
Rebar: steel mill production profitability weakened, and short-term supply-demand imbalance will limit steel price stabilization.
This week, rebar prices drifted lower. The nationwide average price now stands at 3,109 yuan/mt, down 58 yuan/mt WoW from last Friday. Supply side, recently, steel mill production has been largely near the break-even line, and some mills are already in a slight loss stage. However, considering that inventory pressure remains manageable and halting production would lead to larger losses, some mills have begun to lower their operating rates or plan to carry out annual maintenance ahead of schedule in July, which may ease supply-side pressure in the short term. For EAF steel mills, the difficulty in collecting scrap continues, but given that steel scrap prices have fallen less than finished steel, some electric furnace plants are gradually incurring losses and have reduced operating hours. Demand side, the plum rain season has arrived in the south, and rainy weather affected project construction. Moreover, due to the price decline, downstream buyers mostly purchase on a need-to basis, and the market is already in an off-season weak demand phase. On the inventory front, both mill inventories and social inventories began to build up this week. However, agents' cargo pick-up speed fell short of expectations, which started to highlight mill inventory pressure. Looking ahead, as the market enters the off-season, weak demand expectations will leave spot prices with little fundamental support. The market will continue to revolve around raw materials with strong narratives. Short-term spot prices are expected to remain in a bottom-consolidation phase. ; In addition, with high costs at steel mills, profitability hovering around break-even or slight losses, production motivation will weaken. Going forward, attention will be on steel mill production cuts or suspensions.
Hot-Rolled Coil: Supply-Demand Imbalance Widens, Further Downside Room Expected Next Week
HRC prices moved lower this week, leading to sluggish transactions. Supply side, an increase in rolling line maintenance resulted in a slight dip in overall HRC production. Demand side, apparent demand for HRC weakened notably this week, as the rainy season suppressed cargo pick-up and downstream manufacturing entered the off-season, prompting cautious procurement. Coupled with falling steel prices, this intensified the market's wait-and-see sentiment. Inventory side, social inventory of HRC across 86 warehouses nationwide (large sample) tracked by SMM reached 4.2912 million mt this week, up 64,500 mt, or 1.53% MoM. By region, the extent of inventory buildup was larger in the northeast, central, and north China markets than in east China, while south China saw slight destocking. Cost side, iron ore prices drifted slightly lower, but the eighth round of coke price increases took effect, providing slightly stronger cost support for HRC. Going forward, costs may continue to rise. However, the reality of weak finished steel products is gradually emerging, the supply-demand imbalance is widening, and HRC prices still have room to decline. In summary, the most-traded HRC contract is expected to trade in the 3260-3360 range next week.
1. For the data covered in this report, please visit the SMM database at (
2. For SMM steel news, analysis reports, databases and more, please contact Li Ping at the SMM Steel Division on 021-51595782
*The views in this report are based on information gathered from the market and a comprehensive assessment by the SMM research team. The information provided is for reference only, and users assume their own risks. This report does not constitute direct investment, research or decision-making advice. Clients should make decisions prudently and not use this as a substitute for their own independent judgment. Any decisions made by clients are unrelated to SMM. Furthermore, SMM bears no responsibility for any related losses or liabilities arising from the unauthorized or illegal use of the viewpoints in this report.
SMM reserves the right to modify and the final interpretation of the terms of this statement.
![Tin markets in and outside China showed a V-shaped trend intraday, as the most-traded SHFE tin contract dipped to 375,000 before rebounding in a volatile manner[[SMM Tin Futures Briefing]](https://imgqn.smm.cn/usercenter/nBLhE20251217171750.jpg)
