Rebar

Rebar futures fluctuated in a narrow range yesterday, with the 2610 contract closing at 3010 yuan per ton, down 6 yuan from the previous trading day's settlement price, a decline of 0.2%, with open interest increasing by 7,600 lots. Spot prices were largely unchanged, and trading volumes fell. The price of Tangshan Qian'an common billet remained flat at 2,940 yuan per ton, while the price of Zhongtian rebar in the Hangzhou market held steady at 3,030 yuan per ton. National construction material trading volume was 77,100 tons. Data from the China Association of Automobile Manufacturers showed that in July, vehicle production and sales reached 2.573 million and 2.584 million units, respectively, down 6.8% and 8% month-on-month, and down 0.7% and 0.3% year-on-year. For the first seven months, vehicle production and sales totaled 17.567 million and 17.602 million units, both down 3.7% year-on-year, with the decline narrowing from the first half of the year. The market is currently in the traditional off-season for consumption, with persistent hot and rainy weather continuing to constrain construction site activity and keeping end-user demand low. However, raw material prices have stabilized and rebounded, with the strong performance of coke and coking coal providing some support for finished steel. Additionally, expectations of steel mill production cuts are being realized, strengthening the market's support base. Short-term rebar trends are expected to remain weak and volatile.

Iron Ore

The main iron ore futures contract, i2609, fluctuated in a narrow range yesterday, closing at 720.5 yuan per ton, down 1 yuan from the previous trading day's close, a decline of 0.14%, with a trading volume of 136,300 lots and open interest decreasing by 29,600 lots. Port spot prices were stable to slightly lower, with Rizhao Port 60.8% PB fines down 1 yuan to 680 yuan, while Carajas fines remained flat at 831 yuan. Recently, global iron ore shipments and port arrivals have fluctuated frequently. Total shipments in early August reached 33.395 million tons before falling back to 32.012 million tons. Inventory at China's 47 ports continued to climb, reaching a high level of 175 million tons by August 7, indicating a loose supply pattern. On the demand side, steel mill profit rates remain low, hovering around 32% for the 247 sampled mills. Combined with the impact of the hot and rainy off-season, average daily hot metal output, despite a brief recovery from 2.3555 million tons in late July to 2.3803 million tons in the first week of August, has lacked upward momentum, suggesting actual demand remains under pressure. Iron ore prices are expected to continue their volatile trading pattern in the short term.

Coking Coal

Coking coal futures declined yesterday, with the 2609 contract closing at 1,337.5 yuan per ton, down 6 yuan, a decrease of 0.45%, with open interest falling by 36,972 lots. In the spot market, Jiexiu main coking coal (A<10.5, S<1.3, G>80) was quoted at 1,730 yuan per ton, up 30 yuan. At the Ganqimaodu border crossing, Mongolian #5 raw coal was at 1,271 yuan per ton, down 15 yuan, while Mongolian #3 clean coal was at 1,330 yuan per ton, up 30 yuan from the previous price. Mine inspections remain strict in the production areas, with most operating mines actively controlling output due to inspections, historical overproduction, and longwall face changes, keeping overall supply from mines at a low level. There are still 61 coking coal mines suspended in Shanxi Province, with a combined capacity of 65.2 million tons. The approval process for resuming operations is stringent, and the rectification period is prolonged. Recently, premium transactions have been frequently seen in online auctions, with prices for some high-quality, low-sulfur main coking coal and fat coal varieties increasing slightly. The loss-making scope of coke plants is widening, and operating rates are declining. Raw material procurement is generally maintaining a low-inventory, just-in-demand strategy, but some supplementary purchases are being made for cost-effective, high-quality coal types. Hot metal output continues its slight recovery, providing some resilience to end-user demand and supporting market sentiment. Short-term coking coal futures are expected to trade with a relatively strong, volatile trend.

Metallurgical Coke

Metallurgical coke futures fell yesterday, with the 2609 contract closing at 1,906 yuan per ton, down 4 yuan, a decline of 0.21%, with open interest decreasing by 3,491 lots. In the spot market, the price of quasi-first-grade metallurgical coke at Rizhao Port was 1,680 yuan per ton, up 40 yuan from the previous period. The supply of coking coal is tight, and prices are rising, keeping coking costs high. Most coke plants are in a loss-making or marginal profit state. Some plants have proactively taken measures to limit or slightly reduce production, leading to a decline in overall supply. Some coking enterprises have price increase expectations and are showing a degree of reluctance to sell. Some blast furnaces that were previously under maintenance are nearing completion and gradually resuming operations, driving a recovery in hot metal output and marginally improving the rigid consumption demand for coke. However, finished steel transactions are generally average, and steel mills' own profit margins are poor, intensifying the negotiation between coke and steel producers. Short-term metallurgical coke futures are expected to trade with a relatively strong, volatile trend.

Silico-Manganese

On Wednesday, silico-manganese futures strengthened with volatility, with the main contract closing at 5,814 yuan per ton, up 1.25% from the previous session, and open interest in the main contract fell by 27,137 lots to 464,800 lots. The overall black metal sector performed strongly yesterday, pushing the center of gravity for silico-manganese prices slightly higher. Looking at fundamentals, pricing for the main steel mill tender has reached a stalemate, with the final price pending. On the cost side, as silico-manganese futures prices have edged up recently, ore traders have strengthened their willingness to hold firm prices, but downstream willingness to accept is limited. A significant rebound in ore prices is unlikely in the short term, and prices are expected to oscillate at low levels. On the supply side, silico-manganese weekly output was 157,000 tons last week, marking a sixth consecutive weekly decline and approaching the lowest level for the same period in nearly five years. On the demand side, average daily hot metal output increased slightly last week, but the weekly demand for silico-manganese from sampled steel mills fell by 2.19% to 114,300 tons, an absolute low level. On the inventory side, inventory among the 63 sampled silico-manganese enterprises continued to increase week-on-week, reaching 463,000 tons as of August 7, an increase of 10,800 tons from the previous week and a year-on-year increase of 301,500 tons, continuously hitting new highs in recent years. In summary, although weekly silico-manganese output is gradually declining, inventory at sample enterprises is still accumulating. The fundamental driving force for sustained upward movement is limited, and silico-manganese futures prices are expected to continue their volatile trading pattern in the short term.

Ferro-Silicon

On Wednesday, ferro-silicon futures strengthened with volatility, with the main contract closing at 5,924 yuan per ton, up 0.65% from the previous session, and open interest in the main contract increased by 22,942 lots to 382,900 lots. The overall black metal sector performed strongly yesterday, raising the center of gravity for ferro-silicon prices. Looking at fundamentals, recent improvements in market sentiment, production cuts by some enterprises, relatively firm cost support, and relatively tight availability of circulating supply are the main supports. On the supply side, weekly ferro-silicon output fell by 3.16% to 110,500 tons last week. SteelMint data shows the operating rate of ferro-silicon production enterprises in Gansu Province fell by 9.9 percentage points week-on-week to 34%. On the demand side, the weekly demand for ferro-silicon from sampled steel mills fell by 2.09% to 18,500 tons, still at a relatively low level for the same period in nearly five years. Magnesium ingot output increased, with average daily magnesium ingot output rising by 2.62% to 3,136 tons. On the cost side, the electricity settlement price in Inner Mongolia, Baotou, is around 0.40-0.41 yuan per kWh, showing little change. On the inventory side, inventory among the 60 sampled enterprises increased by 5,320 tons to 88,530 tons, a year-on-year increase of 16,760 tons, an absolute high level. However, the number of warehouse receipts and valid advance notices is lower than the same period last year. In summary, supply cuts provide some support for ferro-silicon prices, but it is difficult for the demand side to form a synergistic upward driving force in the short term. Ferro-silicon futures prices are expected to continue their volatile trading pattern in the short term.