Steel Morning Report: Cost center shifts lower, futures steel support weakens.
Market Information: 1. According to the Ministry of Commerce website, the China-US economic and trade teams reached a consensus that China's import tariffs on US coal will be included in the "300 billion versus 300 billion" reciprocal tariff reduction framework, which will facilitate China's annual coal imports from the US in 2027 and 2028.
2. Shanxi Provincial Party Committee Deputy Secretary and Governor Lu Dongliang chaired a provincial coal safety and stable production and supply work promotion meeting on September 26. He emphasized that under the premise of strictly adhering to the safety bottom line, full efforts should be made to promote resumption of work and production, stabilize production and supply, accelerate the reversal of the production decline trend, and accelerate the reshaping of Shanxi's coal industry ecosystem, contributing Shanxi's strength to ensuring national energy security and meeting livelihood energy needs.
3. On September 28, the average cost of 76 independent electric arc furnace construction steel mills was 3,307 yuan/ton, down 1 yuan/ton from yesterday, with average profit of -79 yuan/ton and off-peak electricity profit of 21 yuan/ton, up 1 yuan/ton from yesterday.
4. Industry Online: The total scheduled production of air conditioners, refrigerators, and washing machines in October 2026 is 27.74 million units, up 0.5% from actual production in the same period last year. By product, October household air conditioner scheduled production is 10.28 million units, up 1.5%; refrigerator scheduled production is 8.41 million units, up slightly by 1.7%; washing machine scheduled production is 9.05 million units, down 1.7%.
5. Last week, the blast furnace ironmaking capacity utilization rate of 247 steel mills was 88.49%, down 0.74 percentage points week-on-week; steel mill profitability rate was 6.93%, down 0.86 percentage points week-on-week; average daily molten iron output was 2.3566 million tons, down 19,700 tons week-on-week.
6. Last week, the supply of the five major steel varieties was 7.7968 million tons, down 144,600 tons week-on-week; total inventory of the five major steel varieties was 14.8197 million tons, down 557,600 tons week-on-week, of which construction materials destocked 526,400 tons and plates destocked 31,200 tons; on the consumption side, the weekly consumption of the five major varieties this week was 8.3544 million tons, of which construction materials consumption rose 8.1% week-on-week and plates consumption increased 0.4% week-on-week. (Chu Xinli, Futures Trading Consulting Practice Information: Z0018419, for reference only)
Rebar: Last week, rebar production continued to decline to the lowest level in nearly four years, mainly due to insufficient molten iron supply, rolling mill maintenance, and steel mill variety adjustment; on the demand side, concentrated restocking by downstream buyers before the double holiday drove apparent consumption to rebound significantly, destocking accelerated, and prices received short-term support. However, last week's consumption peak was still down 5% year-on-year, at the lowest level in nearly five years, with insufficient peak season performance, and the sustainability of restocking demand is questionable. The cost side has shown signs of loosening, with coking coal prices pulling back due to steel mill losses transmitting upstream, and although iron ore freight rates are high, the strong supply and weak demand pattern continues, putting pressure on prices. At present, the rebar market is in a weak equilibrium state of low production, low consumption, and low inventory. After the holiday, demand decline and weakening cost support will form pressure, while low production and low inventory provide bottom support. Price upward and downward drivers are limited, and narrow-range oscillation is expected this week. Strategically, the 2610 contract is gradually approaching delivery, with the fluctuation center shifting lower; the mainstream operating range for the rebar 2701 contract is expected to be 3,000-3,120 yuan/ton. (Chu Xinli, Futures Trading Consulting Practice Information: Z0018419, for reference only)
Hot Rolled Coil: Last week, hot rolled coil production continued to decline slightly, down only 9,600 tons week-on-week, with the production reduction pace clearly slowing, and supply approaching a phased bottom. Mill inventories accumulated for consecutive periods, indicating that steel mill shipment pressure is rising. After production line reductions, spot shipments still cannot keep up with output, and internal resources at steel mills have begun to pile up. Trader-side inventories declined for consecutive periods, with social inventory destocking of 74,500 tons in the single week of September 24, the largest single-week decline this month. Apparent demand rose slightly by 12,200 tons, only a moderate recovery, without the sharp jump seen in rebar. Compared with rebar, the downstream manufacturing "Golden September" strength for hot rolled coil is weaker, and demand recovery is relatively moderate. Hot rolled coil futures are range-bound, with upward elasticity weaker than rebar. Strategically, the hot rolled coil 2701 contract reference range is 3,200-3,350 yuan/ton. (Chu Xinli, Futures Trading Consulting Practice Information: Z0018419, for reference only)
Ferroalloys: Maintaining neutral oscillation view: Silicomanganese has increased production for seven consecutive weeks, and production cuts at major southern silicomanganese plants have not yet significantly affected the resumption trend. Ferrosilicon production decreased slightly, with a modest reduction. On the cost side, silicomanganese is relatively stable, ferrosilicon is stable with slight increases, and at the expectation level, carbon elements have some room for concessions, with the key time window in October. Silicomanganese and ferrosilicon are experiencing significant losses, gradually putting pressure on the production side. Overall demand performance is average, steel mill profitability is on the weaker side, production intensity has begun to decline significantly, and if terminal demand still shows no improvement in October, there is still room for production cuts. Overall, upward space is insufficient, prices have loss pressure support on the downside, and oscillating weak operation is expected to dominate. View: Mainly wait and see. Sina cooperative platform China Securities Co., Ltd. (601066) futures account opening, safe and secure.
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