Coke Prices Saw First Round of Cuts, Ferrous Metals Fell Across the Board

SHANGHAI, Jun 21 (SMM) – Hot-rolled coil (HRC) futures prices fell 6.53% yesterday, so did the spot market. On the raw material side, steel mills lowered coke prices by 300 yuan/mt, which coupled with recent decline in iron ore prices, further weakened cost support to steel prices. Panic spread among traders following continuous decline in steel prices. According to SMM survey, many private steel mills reported production cuts and overhauls yesterday. However, the state-owned large steel mills have no plans to overhaul or reduce production. In terms of end demand, the sharp decline in steel prices over the past few days has also suppressed end demand to a certain extent, and downstream buyers turned more cautious. On the whole, the current maintenance and production reduction of private steel mills will have limited impact on the supply side. With expectations for further coke price cuts, HRC prices may still have downside room. However, HRC prices are expected to fall at a slower pace due to corrections following sharp drop.