Market hotspots spanning selected stocks, data centers, market trends, capital flows, and simulated trading clients highlight today's focus. Steel market morning report points to a weak supply-demand balance with futures remaining range-bound amid negotiations.
Market information indicates that on the morning of September 20 local time, Chinese and American trade teams commenced economic and trade consultations in New York. Additionally, the central bank kept its loan prime rates unchanged, with the 1-year LPR at 3.0% and the 5-year and above LPR at 3.5%.
A Mysteel survey of 270 Shanxi coking coal mines reveals that 93 mines can increase production with a capacity of 122 million tons, while 177 mines cannot, representing 267 million tons in capacity. Optimistically, 40 mines may resume operations from September to October, adding 54.5 million tons of capacity. According to bilateral agreements between China and Mongolia, all three major ports will close for one day on September 25 for the Mid-Autumn Festival, with National Day closure arrangements yet to be announced, although 2025 saw a seven-day closure during that period.
Aowei Cloud data shows that October air conditioner production schedules increased by 4.5% year-on-year overall, with domestic sales down 2.5% but exports up 11.1%, revealing a clear divergence between domestic and international sales trends. Last week, supply of five major steel products stood at 7,941,400 tons, up 600 tons week-on-week, while total inventory fell to 15,377,300 tons, down 168,800 tons. Weekly apparent consumption reached 8,110,200 tons, down 1.35%, with building materials consumption up 3.3% and flat products down 1.8%.
Rebar production reached 1,740,700 tons last week, up 24,700 tons week-on-week, marking a modest production resumption as the earlier concentrated electric furnace output cuts temporarily concluded. Long-process steel mills continue to face losses, with coke price increases squeezing profits and limiting significant production expansion, creating supply-side constraints. Inventory shows a dual decline pattern across both mill and social stocks, with mill inventory at 1,593,000 tons, down 25,100 tons, and social inventory at 4,762,700 tons, down 130,300 tons, marking the third consecutive week of social inventory drawdowns while total inventory also declined. Apparent demand reached 1,896,100 tons, up 41,600 tons, as September demand materializes marginally. Infrastructure catch-up work and guaranteed housing delivery support rigid demand pickups, though traders are mainly selling on demand with insufficient speculative restocking, representing a weak repair rather than explosive peak-season activity. Demand growth exceeding supply growth supports inventory drawdowns, yet year-on-year inventory levels remain elevated. Futures continue range-bound trading, with the key focus being whether the destocking slope can be sustained. Strategically, the rebar 2610 contract is referenced within the 3000-3080 yuan per ton range, while the 2701 contract is referenced within the 3050-3130 yuan per ton range.
Hot rolled coil production decreased by 38,900 tons week-on-week to 3,207,800 tons, primarily due to maintenance at some hot rolling mills. HRC profitability exceeds that of rebar, sustaining steel mills' willingness to shift molten iron toward flat products, though reduction efforts remain weak with substantial resumption elasticity. Inventory structure shows clear divergence, with mill inventory up 24,400 tons to 926,600 tons as direct delivery slows and resources accumulate on-site, while social inventory fell 36,600 tons to 2,704,500 tons, reflecting trader destocking rather than active end-user replenishment. Apparent demand declined by 28,400 tons to 3,220,100 tons as manufacturing peak-season fulfillment fell short of expectations, with downstream processors favoring short-term small orders and low inventory procurement. Only automobiles, construction machinery, and exports provide marginal resilience. Supply declines outpacing demand declines barely sustains marginal social inventory drawdowns, but total inventory is rising. Compared to rebar's pattern of rising apparent demand and dual inventory declines, flat product fundamentals appear weaker, driving the convergence of the coil-rebar spread. HRC futures remain range-bound with weaker upward elasticity than rebar. Strategically, the hot coil 2610 contract is referenced within the 3250-3330 yuan per ton range, with the 2701 contract also within 3250-3330 yuan per ton.
Ferroalloy outlook remains neutral with continued range-bound expectations. Steel mill consumption demand increased marginally, yet loss pressures remain significant, with futures pricing negative feedback expectations. If terminal demand fails to improve substantially, the risk of steel mill production cuts may materialize. Silicon iron production declined with notably increased loss pressures, intensifying supply-side reduction pressure. Silicon manganese production increased for six consecutive weeks, but recent profitability has turned broadly negative, also adding reduction pressure. Inventory levels remain relatively ample. Cost side has downward expectations, with manganese ore prices slightly declining and carbon element prices also having room to fall under policy pressure. Overall, alloys may enter a supply-demand weakening scenario with some cost-side concession space. Upside drivers remain limited, suggesting continued range-bound trading. For the previous 11 contracts, profitable bullish put options on silicon iron at execution prices of 6900 yuan per ton or above and silicon manganese at 6500 yuan per ton or above have been fully exited, with a cautious single-side waiting stance recommended.
This content serves as reference only, provided through the cooperation platform of China Securities Co., Ltd. for account opening with security guarantees.
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