Yesterday, the domestic steel market displayed a pattern of narrow-range fluctuation and gradual stabilization. Key futures contracts mostly closed lower, with rebar down 0.16%, hot-rolled coil up 0.03%, iron ore down 0.44%, coke down 2.47%, and coking coal down 3.19%. The spot market was stable, with construction materials and hot-rolled coil quotes in most regions showing steady-to-slightly-adjusted levels, while low-priced resources saw decent transaction volumes.
From a fundamental perspective, supply-side contraction support remains clear. Domestic steel mills continue maintenance, construction material output is shrinking, and total rebar inventories are being drawn down, now below year-ago levels. This self-adjustment on the supply side has solidified a floor for steel prices. On the demand side, the traditional construction peak season window is still open, with downstream projects rushing to meet deadlines. Meanwhile, steel exports have remained above 10 million tons for four consecutive months, and construction machinery exports continue to grow rapidly. Although a slight pullback in raw material prices has marginally weakened cost support, actual supply constraints for coking coal and coke persist. With iron ore port inventories at high levels and mills purchasing on a need-only basis, further downside for raw material prices is also limited. The resilient cost floor has not disappeared. Combined with ongoing macro growth-stabilization policies and counter-cyclical adjustment expectations, the overall downside for the market is limited.
In summary, the steel market is expected to continue its stabilizing fluctuation rhythm today, with spot prices mainly steady and some individual products having room for a modest uptick.
Macro Highlights
1. China's social financing scale and M2 growth both exceed 7%. Currently, China's aggregate financial volume is growing reasonably, with both social financing scale and M2 growth above 7%, creating a suitable monetary and financial environment for sustained economic improvement. Experts say that as the moderately loose monetary policy continues to take effect, social financing conditions will remain appropriate, guiding capital to key areas, balancing growth stabilization, domestic demand expansion, and structural adjustment, and providing solid financial support for a good start to the "15th Five-Year Plan."
2. China's foreign trade showed strong momentum in the first three quarters. The report card for China's foreign trade in the first three quarters is out. A series of data shows that under a complex external environment, China's foreign trade has both achieved an "acceleration" in growth and continued structural optimization: in the first three quarters, China's goods trade imports and exports reached 39.94 trillion yuan, up 18.8% year-on-year. The equipment manufacturing industry played a leading role, contributing nearly 90% of export growth. Double-digit growth was maintained for six consecutive months, and imports and exports exceeded 5 trillion yuan in September.
3. September CPI and PPI year-on-year increases widened. The National Bureau of Statistics released the latest data showing that in September, the consumer price index (CPI) rose 0.9% year-on-year, 0.1 percentage points wider than the previous month. Meanwhile, the industrial sector, driven by energy, raw materials, and resource product prices, also maintained relatively high prosperity. That month, the producer price index (PPI) for industrial products saw both year-on-year and month-on-month increases widen.
Spot Product Analysis
1. Construction materials: weak and steady consolidation. Yesterday, spot quotes for construction materials in most regions were slightly lowered by 10 yuan/ton, while end-user rigid demand procurement showed signs of marginal recovery. On the supply side, construction material output is gradually shrinking, total rebar inventories continue to be drawn down, and overall inventory pressure is lower than the same period last year. Combined with infrastructure support policies continuously releasing demand resilience, coal and coke prices on the cost side still provide bottom support, and the market lacks downward momentum. Overall, the construction materials market is expected to continue a weak and steady consolidation trend today, with limited price fluctuation room.
2. Hot-rolled coil: steady with adjustments. Yesterday, hot-rolled coil market prices were generally stable, with slight loosening in some regions, and the smoothness of low-priced resource transactions improved somewhat. Positive demand signals are currently accumulating. The manufacturing PMI is in expansion territory, downstream sectors such as automobiles, general machinery, and steel structures are showing marginal rebound signs in production and sales, and end-user rigid procurement rhythm is steadily recovering. Combined with growth-stabilization policy expectations continuing to support market sentiment, the logic of marginal supply-demand improvement is gradually being validated, and traders' willingness to sell at low prices continues to weaken. The hot-rolled coil market is expected to operate in a steady-with-adjustments manner today.
3. Scrap steel: narrow-range consolidation. Yesterday, the scrap steel market operated steadily overall. On the supply side, scrap steel resource arrivals remained normal, mill arrivals and daily consumption were basically matched, and there was no obvious resource tightness or concentrated release. Recycling and processing merchants mainly focused on quick turnover. On the demand side, steel mills maintained their existing production pace, short-process enterprises showed limited changes in operating rates, and rigid scrap consumption still exists, but procurement strategies are more rational, with need-based restocking clearly evident. The scrap steel market is expected to continue a narrow-range consolidation trend today, with local adjustments possibly following mill arrival rhythms.
4. Iron ore: range-bound fluctuation. Yesterday, the iron ore market showed a slight rebound followed by range-bound consolidation. Spot price fluctuations generally narrowed, and port spot transactions remained at rigid-demand levels. On the supply side, global iron ore shipments rebounded last week, with Australia and Brazil shipments both increasing. Domestic arrivals continued to rise, port inventories remained high, and the overall supply pattern was relatively loose. On the demand side, mill hot metal output edged up month-on-month, with mills mainly purchasing on a need-only basis. The iron ore market is expected to fluctuate within a range today.
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