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Steel Morning Report: Lack of Drivers, Futures Trade in Narrow Range Market Information: 1. The Ministry of Industry and Information Technology convened the 18th Manufacturing Enterprises Symposium, with 12 enterprise leaders from key sectors including steel, non-ferrous metals, new materials, automobiles, machinery, shipbuilding, light industry, pharmaceuticals, and electronics in attendance. The meeting emphasized active participation in industry rule-making and self-regulatory mechanism development, and a conscious effort to resist "internal competition." 2. The latest data from the China Index Academy shows that the planned construction area for residential land transactions in 300 cities in 2025 was 620 million square meters, a year-on-year decrease of 13.5%, with a transaction value of 2.3 trillion yuan, down 10.6% year-on-year. 3. On January 13, the average cost for 76 independent electric arc furnace construction steel plants was 3,370 yuan/ton, an increase of 2 yuan/ton from the previous day. The average profit showed a loss of 37 yuan/ton, while the profit during off-peak electricity hours was 77 yuan/ton. 4. On January 13, the transaction volume of iron ore at major national ports was 841,000 tons, an increase of 11.8% from the previous day. Transactions of construction steel products by 237 mainstream traders amounted to 83,600 tons, a decrease of 20.9% from the previous day. 5. Last week, the blast furnace operating rate at 247 steel mills was 79.31%, an increase of 0.37 percentage points from the previous week. The profit rate of steel mills was 37.66%, a decrease of 0.44 percentage points from the previous week. Daily hot metal output averaged 2.295 million tons, an increase of 20,700 tons from the previous week. 6. As of January 9, the weekly output of the five major steel products was 8.1859 million tons, an increase of 34,100 tons week-on-week. The total inventory of the five major steel products was 12.5392 million tons, an increase of 217,700 tons week-on-week. The weekly consumption of the five major steel products was 7.9862 million tons, a decrease of 5% week-on-week. Among them, rebar output increased for the fourth consecutive week, rising by 28,200 tons this week to 1.9104 million tons. Total rebar inventory accumulated by 160,800 tons to 4.3811 million tons, while apparent demand dropped by 254,800 tons to 1.7496 million tons. Hot-rolled coil output increased by 10,000 tons to 3.0551 million tons, with destocking of 28,300 tons bringing inventory to 3.6813 million tons. Apparent demand for hot-rolled coil decreased slightly by 24,300 tons to 3.0834 million tons.
Rebar: Last week, rebar output increased by 28,200 tons to 1.9104 million tons. Total rebar inventory accumulated by 160,800 tons to 4.3811 million tons, while apparent demand dropped sharply by 254,800 tons to 1.7496 million tons. Currently, rebar output has risen for the fourth consecutive week, while demand continues to weaken, indicating a weak fundamental picture. From a supply and demand perspective, the recent resumption of production at some steel mills and the increase in hot metal output are positive for raw material and fuel prices. However, following the release of speculative demand, downstream end-user procurement may become more cautious. Poor trading volume in the steel market suggests that the short-term price increase may slow down.
Hot-Rolled Coil: Last week, hot-rolled coil output increased by 10,000 tons to 3.0551 million tons. Inventory decreased by 28,300 tons to 3.6813 million tons, while apparent demand dipped slightly by 24,300 tons to 3.0834 million tons. Pressure from previous capacity and product switching persists, keeping supply relatively loose. On the demand side, the off-season combined with weather constraints means rigid demand from end-users dominates, with almost no incremental demand. Traders hold cautious expectations for the future market, widely adopting a strategy of "low inventory, fast turnover." They are actively selling to recoup funds, but it is important to note that the absolute inventory level remains high. After the release of speculative demand, downstream end-user procurement may turn cautious, potentially slowing the short-term price increase.
Strategy: The short-term trading range for rebar 2605 is referenced at 3,100-3,200 yuan/ton; the trading range for hot-rolled coil 2605 is referenced at 3,250-3,350 yuan/ton.
Ferroalloy Morning Report: Continued Volatility View: Neutral Overall ferroalloy supply remains low, but with significantly improved profits and some producers engaging in hedging after the substantial futures price increase, a gradual transition into a slow production growth cycle is anticipated. Upstream factory inventories are diverging; ferrosilicon inventory is acceptable, while silicon manganese inventory pressure persists. The cost side is relatively stable, with coke initiating its first round of price increases. Manganese ore mine quotations for China in February increased by $0.17-$0.25/tonne-degree month-on-month, indicating underlying price support remains. On the demand side, expectations of steel mill production resumptions and restocking provide support. However, the pace of resumption is constrained by mills' low profitability, and restocking potential is limited. Demand is improving marginally, but the extent of improvement is cautious. Prices are expected to maintain a volatile pattern. View: Wait-and-see.
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