According to Sina Finance, pressure from a marginal decline in steel demand is gradually emerging, while exports remain high. Cost support persists; steel prices are expected to fluctuate within a narrow range in the short term, with limited drivers for significant upward or downward movement.

The steel market has recently shown a trend of weak fluctuation, with price volatility narrowing. Downstream demand is weakening as the market enters the off-season—particularly for construction steel—with the southern region approaching the "Plum Rain" season, causing outdoor construction activity to slow down. Steel mill profit margins have fallen below 60%, and hot metal output is expected to decline slightly.

On the macroeconomic front, the US added 172,000 non-farm jobs in May, far exceeding the market expectation of 85,000, leading the market to bet on a Federal Reserve rate hike. US airstrikes hit multiple locations in southern Iran, reigniting US-Iran tensions. China's exports in May rose 19.4% year-on-year, surpassing the expected 12.3% and the previous month's 14.1%. Export growth exceeded expectations again in May; exports to the US and South Korea grew by over 30% year-on-year, while exports to ASEAN rose by over 20%, indicating a more balanced regional export structure compared to last year.

China exported 10.341 million tons of steel in May, an increase of 843,000 tons (up 8.9%) from the previous month. Cumulative steel exports from January to May totaled 44.554 million tons, down 8.1% year-on-year.

Regarding coking coal and coke ("double coke"), Lyuliang City, Shanxi Province, held a special meeting to further enforce local accountability for coal mine safety. As Shanxi coal mines conclude their self-inspections, the pace of resuming production at halted mines has accelerated significantly; since May 23, 43.7% of the previously halted mines have resumed operations. However, output at most mines declined after resumption; among the 59 mines that restarted, daily raw coal production dropped from 292,600 tons pre-shutdown to 195,600 tons post-resumption—a decrease of 33.15%. Furthermore, with the intensification of safety supervision in Shanxi, an increasing number of active and recently restarted mines are being forced to halt operations due to safety inspections; consequently, coal production at the source is expected to remain low for a considerable period. Cailian Press, June 8 – The Shaanxi Provincial Development and Reform Commission issued a notice regarding energy supply assurance for the 2026 summer peak season, emphasizing the need to ensure stable coal production and supply. Development and reform departments in coal-producing cities are required to fulfill local responsibilities and urge coal enterprises to release advanced production capacity in a lawful and compliant manner—prioritizing safety while maximizing output and ensuring stable, increased production. With import channels opening up and supply expectations easing, prices for coking coal and coke are projected to fluctuate at high levels in the short term.

Regarding iron ore, the potential for increased hot metal output has narrowed, and prices are trending downward amidst volatility. Global shipments last week totaled 35.47 million tons, a week-on-week increase of 5.13%. Specifically, shipments from 19 Australian ports reached 20.20 million tons (up 8.83% week-on-week), while shipments from 19 Brazilian ports totaled 8.153 million tons (down 5.85% week-on-week). In terms of shipments from major miners, FMG shipped 3.956 million tons (down 1.00% week-on-week); BHP shipped 6.745 million tons (up 26.29%); Rio Tinto shipped 7.116 million tons (up 8.49%); and Vale shipped 5.854 million tons (down 3.64%). Arrivals at 45 ports totaled 27.312 million tons last week, a week-on-week increase of 6.44%.

Steel demand is under pressure as the characteristics of the off-season become apparent. On the raw materials side, prices remain strong—bolstered by intensified safety regulations at coal mines in major producing regions—providing robust cost support. Conversely, terminal demand for construction materials continues to weaken due to factors such as construction restrictions, high temperatures, and rainfall, leading to a gradual loosening of the supply-demand balance.

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