SunSirs: CISA Reports a Decline in Daily Crude Steel Output and a Drop in Steel Inventories in Late June

Data from the China Iron and Steel Association (CISA) shows that in late June, the average daily crude steel output of key steel enterprises stood at 2.024 million tonnes, down 3.6% from the previous ten-day period. Steel product inventories totaled 16.28 million tonnes, a decrease of 9.1% from the preceding ten-day period but an increase of 2.8% compared to the same period of the previous month.

Analysis and Commentary

Cold rolled Sheet

Data from the China Iron and Steel Association (CISA) indicates that in late June, the average daily crude steel output of key monitored steel enterprises fell by 3.6% month-on-month, while steel inventories dropped by 9.1%. With a contraction in steel supply and a positive trend in inventory reduction, the supply-demand dynamics for cold rolled sheet—a core steel product—are favorable, providing support for upward movement in both spot and futures prices.

Rebar

The fundamentals of contracting crude steel supply and overall steel inventory reduction are bolstering rebar prices. On July 8, the closing price for the dominant rebar contract (2610) was 3,096 RMB/ton, up 14 RMB/ton from the previous day; trading was active, and prices are trending strongly in the short term.

Hot Rolled Coil

Favorable supply-demand dynamics are supporting hot-rolled coil prices. On July 8, the benchmark contract (2610) closed at 3,300 RMB/ton, up 5 RMB/ton from the previous day; open interest rose by 6,683 lots, indicating increased market interest and a strengthening price trend.

Stainless Steel

Demand for stainless steel remains supported despite the broader context of crude steel production cuts. Although the benchmark contract (2608) pulled back by 210 RMB/ton on July 8, there are no significant bearish factors in the overall fundamentals, suggesting room for a price rebound.

Coke

Daily crude steel output fell by 3.6% month-on-month in late June, leading to a slight weakening in demand for coke—a key steelmaking raw material. On July 8, the benchmark coke contract (2609) edged down by 1 RMB/ton, with prices facing short-term pressure.

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