Data: SHFE, DCE market movement (Sep 01)

Iron ore concentrate prices in west Liaoning are relatively stable, with current 66% grade iron ore concentrates at a wet basis, tax-exclusive ex-works price of 710-720 yuan/mt. Local iron ore concentrate resources remain tight overall, providing some support for ore prices. On the demand side, steel mills are facing deepening profit losses, leading to a relatively strong desire to bargain down prices, though imported iron ore prices have shown relatively strong momentum recently.

The most-traded HRC contract initially held steady before falling today, closing at 3,299, down 0.18% intraday. Spot prices were mostly stable, with spot cargo holding firmer than futures. In terms of supply, this week's HRC impact from maintenance was 109,700 mt, down 12,900 mt WoW. Next week's HRC impact from maintenance is expected at 82,600 mt, down 27,100 mt WoW, leaving HRC supply relatively ample. On the demand side, spot prices were mostly stable today and more resilient than futures, but actual transactions were mediocre. On the raw material side, bearish chatter on iron ore today pulled ore prices back somewhat. Overall, the probability of a downside breakout in raw materials before the holiday is relatively small, though post-holiday negative feedback risks warrant caution. Looking ahead, cost support is unlikely to provide a clear directional trend in the near term. Improving steel port departures and export orders will lend some support to steel prices. The most-traded HRC contract is expected to continue consolidating in a narrow range in the near term, with attention on pre-holiday demand release.

[Sheets & Plates] Export prices remain firmer than domestic trade prices. Today, export prices for HRC and other sheets & plates edged up $1/mt WoW, with HRC transaction prices concentrated in the $494-497/mt range. Inquiries were slightly weaker than last week.