Here is a summary of the key movements and outlook for major industrial commodities on July 21st.
Rebar
Rebar futures experienced a decline in the previous trading session. The closing price for the main 2610 contract settled at 3,096 yuan per ton, marking a decrease of 16 yuan, or 0.51%, from the prior day's close. Open interest fell by 38,500 lots. Spot prices edged lower with weaker trading activity, as the price for Tangshan's Qian'an billet dropped by 10 yuan to 2,970 yuan/ton, and Hangzhou's Zhongtian rebar price decreased by 10 yuan to 3,100 yuan/ton. National building materials trading volume was 78,400 tons. Data indicates national building materials inventory fell by 1.05% week-on-week to 5.65 million tons, while hot-rolled coil stock increased marginally by 0.03% to 2.2 million tons. The shift from inventory build-up to drawdown suggests a slight, temporary improvement in supply-demand dynamics. However, a broad slowdown in investment growth across real estate, infrastructure, and manufacturing sectors in June continues to weigh on steel demand, acting as the primary drag on prices. Counteracting this, losses at steel mills have widened, leading to increased production cuts and maintenance, particularly in the Tangshan area, which has alleviated some supply-side pressure. The rebar market is currently caught between demand-side pressure and cost-based support, with expectations for continued consolidation.
Iron Ore
Iron ore futures also closed lower. The main i2609 contract finished at 758 yuan per ton, down 4 yuan or 0.52% from the previous session. Trading volume was 212,700 lots, with open interest decreasing by 16,000 lots. Port spot prices were slightly softer. Supply-side data shows a significant weekly increase in global iron ore shipments, which rose by 4.1 million tons to 33 million tons. Shipments from Australia and Brazil combined surged by 4.36 million tons to 26.86 million tons, with both countries contributing to the rise. Concurrently, iron ore arrivals at Chinese ports saw a substantial weekly increase. This points to a renewed build-up in short-term supply pressure. On the demand side, the trend of contraction is clear. Daily hot metal output has declined for two consecutive weeks, and the number of blast furnaces undergoing maintenance far exceeds those resuming operations, as mill profitability deteriorates further. With supply increasing and demand falling, iron ore prices are expected to remain under pressure with a weak and volatile near-term outlook.
Coking Coal
Coking coal futures ended the day higher. The main 2609 contract settled at 1,272 yuan per ton, gaining 11.5 yuan or 0.91%, while open interest decreased by 2,444 lots. In the spot market, prices were mixed. Production in key producing regions is recovering as mines resume operations following safety inspections, which remain stringent. Coking plant profits are around 50 yuan per ton, maintaining their operational enthusiasm and keeping utilization rates high. However, continued losses at steel mills are leading to a marginal reduction in demand for raw materials from blast furnaces. The coking coal market is anticipated to trade within a range in the short term.
Coke
Coke futures moved in the opposite direction, closing lower. The main 2609 contract finished at 1,840 yuan per ton, down 24 yuan or 1.29%, with open interest increasing by 4,113 lots. Spot prices at ports declined. Major steel mills in Hebei and Tianjin have announced a price reduction for coke purchases by 50-55 yuan per ton, effective July 22nd. While coking plants maintain operations due to thin profits, some traders have adopted a wait-and-see approach, delaying purchases. With steel mills struggling for profitability and initiating price cuts while actively controlling coke arrivals, the near-term outlook for coke futures is tilted towards weakness within a consolidating pattern.
Ferromanganese (Silico-manganese)
Ferromanganese futures weakened on Monday. The main contract closed at 5,802 yuan per ton, down 0.72%, with open interest falling by 4,523 lots to 437,500 lots. Market prices varied across regions. The overall ferrous sector was weak, pulling prices lower. Fundamentally, weekly production continues to decline, with notable drops in operating rates in Inner Mongolia and Ningxia. Demand remains subdued, as weekly consumption by sample steel mills fell 2.79% to 117,400 tons. Inventories at sample enterprises rose again week-on-week, reaching 422,200 tons, a multi-year high. The combination of weak supply and demand alongside high inventory levels provides limited fundamental support, suggesting prices will likely remain under pressure and range-bound.
Ferrosilicon
Ferrosilicon futures also weakened on Monday. The main contract settled at 5,782 yuan per ton, a decline of 0.38%, with open interest down by 1,766 lots to 214,200 lots. Spot prices were largely steady. Similar to ferromanganese, it was influenced by broader sector weakness. Weekly production saw a slight decrease. Demand from the steel sector is weak, with weekly consumption by sample mills down 3.1% to 19,000 tons, at a low level for the period. While non-steel demand showed some improvement, inventory at sample enterprises, though down week-on-week, remains elevated in absolute terms. The supply-demand balance is expected to stay loose, offering limited upward momentum. Ferrosicon prices are forecast to trade under pressure with a consolidating bias in the near term.
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