Download App

[Caixin Futures: Ferrous Metals Under Overall Pressure, Coking Coal Price Cuts Rise] ⑴ The steel market continues its low-level fluctuation pattern. Production continues to decline while demand remains relatively resilient. The supply-demand situation has not deteriorated further, but the expectation of weak demand-driven growth remains unchanged, limiting upward potential. ⑵ In terms of funding, both long and short positions in the top 20 rebar futures contracts decreased, with short positions decreasing more significantly; both long and short positions in the hot-rolled coil futures contracts decreased, with similar reductions in open interest. Technically, the rebar futures contract closed flat with reduced open interest. The 40-day moving average remains a key resistance level, while the support level has moved up to around 3090 yuan per ton. ⑶ In terms of valuation, steel mill profits continue to be under pressure, with losses widening. However, futures prices are close to the off-peak electricity cost of electric arc furnaces in East China, and the previous undervaluation has been somewhat corrected. Overall, inventory pressure remains, and the weak market conditions limit the rebound's potential. The market awaits the release of positive macroeconomic news, and a breakthrough in either direction is unlikely in the short term. (4) Iron ore prices fluctuated at low levels. On the supply side, BHP's labor negotiations failed to reach an agreement; FMG faced restrictions on deliveries of some products, coupled with a seasonal decline in shipments after the June fiscal year's sales push. Short-term supply-side disruptions provided some support to the market. (5) On the market, the September contract saw reduced open interest and fluctuated before closing lower. The upper resistance level is likely around 770 yuan per ton, while the lower support level remains at 750 yuan. In terms of funds, both long and short positions among the top 20 holders decreased, with short positions decreasing more significantly. Further changes in fund flows should be monitored. Overall, supply-side disruptions have not completely subsided, but given the overall decline in demand, the upward momentum of the market is expected to be limited, and a fluctuating pattern is likely to continue in the short term. (6) Coking coal prices fluctuated at low levels. On the supply side, safety inspections at production sites remained stringent, and the pace of production resumption in Shanxi coal mines was slow, limiting supply release. On the demand side, pig iron production declined from its high level, coupled with rising expectations of coking coal price reductions. Downstream buyers maintained only essential purchases, and intermediaries gradually lowered prices to move inventory. Market trading was sluggish, and coal prices are likely to fluctuate weakly in the short term. (7) In terms of capital flow, both long and short positions in the top 20 holders of the September contract decreased, with a larger reduction in long positions, indicating insufficient willingness for bulls to actively attack. Technically, the September contract closed lower after a period of consolidation with reduced open interest, facing resistance from the 40-day and 60-day moving averages, while support is expected around 1250 yuan per ton. (8) The driving force of coking coal is weak. On the cost side, the price of coal used for furnace operation continues to weaken, coking plant profits have slightly recovered, and production enthusiasm is still acceptable, with output expected to increase steadily. On the demand side, pig iron production has been confirmed to have peaked, and a subsequent decline is expected. The number of steel mills controlling production continues to increase, further weakening the restocking drive. (9) In terms of valuation, the futures main contract is trading at a large discount to the spot price, and the market valuation is already at a relatively low level. Overall, steel mill losses continue to widen, increasing the willingness to lower raw material prices. The first round of coking coal delivery is approaching, and the market lacks upward momentum in the short term; however, the large basis may limit the downside potential.