On July 25, the steel spot market was dominated by price increases, and the main varieties in the futures market were dominated by price increases. After noon, the main coking coal futures contract hit the daily limit for the fourth consecutive day.
Rebar, hot-rolled coil, and coke rose by about 2%, while iron ore fell by 1.11%. The current market sentiment is still hot, and coke has risen for three consecutive rounds, but iron ore has fallen for three consecutive days. In addition, the demand for steel in the off-season is difficult to continue to improve.
The third round of price increase for coke has basically been implemented
On the afternoon of July 24, the Market Committee of the China Coking Industry Association held a special market analysis meeting.
The representatives at the meeting unanimously agreed that the current coke market should raise prices as soon as possible.
In order to improve the difficult situation of the industry’s operation and realize the reasonable distribution of profits in the industrial chain, the participating enterprises reached the following resolutions:
(1) From 0:00 on July 25, the price of rammed wet quenched coke will be increased by 50 yuan/ton for steel mill customers, and the price of rammed dry quenched coke will be increased by 55 yuan/ton.
(2) Continue to adhere to the business model of prepayment, do not sell on credit, and do not give up the right to weigh, measure and test. At present, the third round of coke price increase is expected to be implemented today, and the fourth round of coke price increase is expected next week. The cost support of steel is strong, which is beneficial to the trend of steel prices.
Steel mills’ purchasing prices show a downward trend
The August long-term purchase price of high-carbon ferrochrome of Shanxi Taigang and Tsingshan Group fell by 200 yuan/50 basis tons and 100 yuan/50 basis tons respectively, which was in line with market expectations.
Stainless steel rebounded this week driven by positive macroeconomic policies, and the sentiment of raw materials was supported.
The chrome ore market waited and saw the long-term contract price of futures. Coke was strong in the short term, and two rounds of price increases were implemented. The cost of ferrochrome temporarily stabilized. Affected by the decline in the purchase price of ferrochrome steel mills, the spot ferrochrome still has a small correction space.
However, the retail iron price has changed little in the short term, and factories mainly deliver orders.
Four ministries take action to “fight internal circulation”
After the central government clearly required the prevention of “involutionary” vicious competition, relevant ministries and commissions took active actions and introduced relevant “anti-involutionary” measures.
On July 24, the National Development and Reform Commission and the State Administration for Market Regulation issued a notice on soliciting public opinions on the “Draft Amendment to the Price Law of the People’s Republic of China (Draft for Comments)”, which improved the identification standards for low-price dumping to regulate market price order and govern “involutionary” competition; the State-owned Assets Supervision and Administration Commission held a seminar for heads of local state-owned assets supervision and administration commissions in Beijing, requiring them to take the lead in resisting “involutionary” competition and strengthen restructuring and integration; Shi Zihai, deputy director of the National Medical Insurance Administration, said that the 11th batch of centralized procurement will no longer use the simple lowest price as a reference, and the company with the lowest quotation must publicly explain the rationality of the quotation and promise not to quote below cost. The recent “anti-involutionary” market continues to ferment, boosting market confidence and benefiting the price trend of steel.
