Hot sections include self-selected stocks, data centers, market trends, capital flows, and simulated trading clients. The steel morning report highlights that production costs have been further consolidated, pushing the center of gravity for steel futures higher.
Market Information: The U.S. S&P Global Manufacturing PMI for August slipped to 53.2 from 53.9, while the Services PMI climbed to 56.8, the highest level since December 2024. Meanwhile, the Eurozone's manufacturing PMI rose to 52.8, marking a new high since May 2022. Data from the National Bureau of Statistics shows that from January to July, the ferrous metal smelting and rolling sector (the steel industry) recorded profits of 29.09 billion yuan, a year-on-year decline of 51.2%. According to the Passenger Car Market Information Joint Branch, retail sales of passenger vehicles nationwide totaled 956,000 units from August 1 to 23, down 22% year-on-year and 2% month-on-month; new energy vehicle retail reached 614,000 units, down 12% year-on-year and 2% month-on-month. On August 27, the average production cost for 76 independent electric arc furnace construction steel mills stood at 3,287 yuan per tonne, up 3 yuan from the previous day, with an average loss of 105 yuan per tonne and a valley electricity profit loss of 5 yuan per tonne. This week, the capacity utilization rate of 523 coking coal mine samples was 68.1%, down 0.1% week-on-week, with refined coal daily output at 633,000 tonnes, an increase of 1,000 tonnes, and refined coal inventories at 1.443 million tonnes, down 211,000 tonnes. On August 27, iron ore transactions at major ports reached 710,000 tonnes, up 17.36% from the previous day, while construction steel transactions among 237 mainstream traders totaled 85,500 tonnes, down 4.83%. This week, the supply of five major steel products stood at 7.9176 million tonnes, down 100,700 tonnes or 1.3% week-on-week; total inventories were 15.9146 million tonnes, down 183,400 tonnes or 1.1%; and apparent consumption was 8.101 million tonnes, down 1.3% month-on-month. (This information is for reference only.)
Rebar: This week, rebar output saw a slight decline, with inventories and demand also easing. As the market transitions from off-season to peak season, steel mills are maintaining low production levels. Capital is preemptively positioning for demand recovery after the end of August, with expectations driving the move ahead of actual fundamentals. However, construction steel transaction volumes remain unstable, and substantial volume growth still requires further observation. On the cost side, the second round of coke price hikes has been implemented, further solidifying cost support. Steel futures are expected to maintain a volatile and firm trend.
Hot-Rolled Coil: This week, hot-rolled coil output fell by 39,700 tonnes to 2.8827 million tonnes, with total inventories down 1,700 tonnes to 4.3755 million tonnes and apparent demand down 48,600 tonnes to 2.8844 million tonnes. Firm cost support is driving the current upward trend, but the room for demand growth remains limited, and downstream acceptance of higher steel prices is still uncertain. Strategically, chasing highs should be approached with caution. The reference range for rebar 2610 contracts is 3,050-3,130 yuan, while hot-rolled coil 2610 contracts are seen in the 3,270-3,400 yuan range.
Ferroalloys: Supply is rising while demand awaits verification, leading to a neutral outlook. Steel mill production intensity has slightly declined, with daily hot metal output down 10,800 tonnes, reducing alloy consumption levels. Mill profitability remains under pressure, and while the resumption of production in September is expected to be moderate, there is little momentum for significant cuts. Ahead of the Mid-Autumn Festival and National Day holidays in September, downstream restocking demand is anticipated, so overall demand should not be too weak. Cost support is strong, with carbon elements and electricity prices firm, and manganese ore prices continuing their rebound. This week, output increased week-on-week, with silicon metal factory inventories and warrants rising notably, while silicon manganese inventories fell but remain at high levels. After sustained price gains, attention should be paid to whether hedging willingness rebounds significantly. The outlook for silicon metal 11 contracts is 5,850-6,200 yuan per tonne, and for silicon manganese 11 contracts, 5,800-6,150 yuan per tonne. Strategically, put options on silicon metal 10 contracts at 5,400-5,600 yuan and silicon manganese 10 contracts at 5,300-5,400 yuan should be exited to lock in gains, while earlier long positions can be partially profit-taken, with remaining positions held. China Securities Co., Ltd. (601066) recommends opening accounts on its platform for secure trading.
Comments