Steel products: Accelerated inventory drawdown and rising input costs suggest prices may trend higher with a firm tone. In the rebar segment, national output fell by 39,500 tonnes week-on-week to 1.6913 million tonnes, a year-on-year decrease of 495,500 tonnes. Social inventories declined by 58,600 tonnes to 5.0546 million tonnes, up 368,000 tonnes year-on-year. Mill inventories decreased by 38,300 tonnes to 1.595 million tonnes, down 118,400 tonnes from the same period last year. Apparent rebar demand eased by 24,600 tonnes to 1.7882 million tonnes, a drop of 232,500 tonnes year-on-year. Production continues to decline, inventories have fallen for a fourth straight week, and demand has softened, painting a fairly neutral supply-demand picture. The market is entering its traditional consumption peak season, yet recovery remains slow with demand still at low levels, which pressures prices. However, the fourth round of coke price increases has been implemented, iron ore has strengthened partly due to rising freight rates, and steel mill losses are widening, with rebar output falling to historic lows. Since supply is contracting faster than demand, destocking is performing notably better than the same period last year, with total rebar inventories up just 249,600 tonnes year-on-year. Mill stocks have already declined year-on-year, giving mills greater pricing confidence. Overall, low supply, steady inventory reduction, and cost support point to a probable continuation of a firm, range-bound trend for rebar futures.

In the hot-rolled coil segment, weekly national output rose by 68,100 tonnes to 2.9508 million tonnes, down 191,600 tonnes year-on-year. Social inventories were virtually unchanged, falling just 100 tonnes to 3.6514 million tonnes, an increase of 707,800 tonnes year-on-year. Mill inventories dropped by 34,400 tonnes to 689,600 tonnes, down 110,200 tonnes on an annual basis. Apparent demand increased by 100,900 tonnes to 2.9853 million tonnes, a year-on-year decline of 68,300 tonnes. With output easing, inventories still shrinking, and demand improving, the data skews positive. According to the National Bureau of Statistics, the manufacturing PMI for August 2026 came in at 49.8%, up 0.6 percentage points month-on-month, with the new orders sub-index climbing 2.1 percentage points to 50.6%, signalling a clear improvement in manufacturing demand. The four consecutive rounds of coke price hikes plus tight coking coal supply have pushed up mills' cost base, offering solid support for hot-rolled coil prices. Even so, a lack of trend-driven demand and rising supply will likely limit upside potential. The launch of hot-rolled coil options on the Shanghai Futures Exchange on September 10 is expected to boost market activity. Near-term futures are likely to keep moving in a firm, range-bound pattern.

Iron ore: Continued rise in freight rates supports a steady-to-firmer price trajectory. On the supply side, shipments increased this period, with global volumes reaching 35.716 million tonnes, up 2.727 million tonnes week-on-week. Australian shipments rose by 955,000 tonnes to 20.281 million tonnes, Brazilian shipments increased by 1.034 million tonnes to 8.403 million tonnes, and shipments from other regions grew by 738,000 tonnes to 7.032 million tonnes. Arrivals at ports, however, declined sharply, with volumes at 47 monitored ports falling by 7.657 million tonnes to 19.518 million tonnes. Despite higher global shipments, the substantial drop in arrivals indicates a phase of tighter supply. On the demand side, daily hot metal output at 247 sampled mills edged up by 2,200 tonnes to 2.3682 million tonnes, up 79,800 tonnes year-on-year. Blast furnace operating rates rose 0.32 percentage points to 82.64%, while capacity utilisation increased 0.08 percentage points to 88.92%. This period saw seven furnaces resume operations and five enter maintenance. Mill losses continue to expand, with the profitability ratio down 2.17 percentage points to 30.3%. The modest uptick in hot metal output suggests some demand improvement, but persistent losses cast doubt on the sustainability of this recovery. Inventory data shows iron ore stocks at 47 ports fell by 2.4443 million tonnes week-on-week to 171.308 million tonnes, still 27.0508 million tonnes higher year-on-year. Vessels at port numbered 138, up 11 week-on-week. Imported ore inventories at 247 mills increased by 434,400 tonnes to 89.0348 million tonnes, running 363,900 tonnes below last year's level. Port inventories have declined noticeably but remain significantly elevated relative to a year ago, while some mills are gradually restocking. Overall, shipments remain at high levels, but the sharp drop in arrivals temporarily eases spot supply pressure; however, high shipment volumes suggest arrivals will recover in the coming weeks. Demand-side hot metal output has inched up, yet declining mill profitability is curbing enthusiasm for output restoration. With sea freight rates climbing steadily — the Brazil-to-China rate has risen to $41.12 per tonne, up around $13 since the end of June — iron ore continues to enjoy strong cost support. Prices are expected to maintain a firm, oscillating pattern in the near term.

Coking coal and coke: Fourth round of coke price hikes takes effect, trimming losses for coke producers. Coke prices rose by 200 yuan per tonne for Tianjin quasi-first-grade material, 220 yuan per tonne for Lvliang quasi-first-grade and Tangshan first-grade products, and 130 yuan per tonne for Rizhao quasi-first-grade material. Futures also advanced, with the coke 2701 contract adding 17.5 yuan per tonne. On the supply side, the pace of coal mine restarts remains slow, with returning mines operating below capacity. Coking coal prices are firm, and the fourth round of coke price increases has been implemented, with the second round of increases expanding to 100-110 yuan per tonne. Cash production losses for coke makers are currently around 90 yuan per tonne, keeping operating enthusiasm subdued, and some independent plants continue to run at low utilisation rates. Overall coke output ticked up slightly this week, with production at independent plants down 100 tonnes per day and at 247 mills up 600 tonnes per day. Demand appears mixed: end-user demand slipped, with rebar apparent demand dropping 24,600 tonnes week-on-week to 1.7882 million tonnes, down 232,500 tonnes year-on-year. However, rising blast furnace operating rates and hot metal output — up 2,200 tonnes per day to 2.3682 million tonnes — have improved coke demand. Inventories tightened across the board: stocks at 230 independent coking plants fell by 48,400 tonnes, steel mill coke inventories dropped by 288,900 tonnes, port holdings decreased by 79,800 tonnes, and total coke inventories declined by 431,100 tonnes. Looking ahead, slow coal mine restarts and firm coking coal prices, coupled with the implemented fourth-round price increase of 100-110 yuan per tonne, have eased losses for coke producers and alleviated some margin pressure. Supply may recover marginally, though most mills remain loss-making with profitability around 30%. Some mills hold low coke inventories and are buying actively, suggesting the coke market will likely trade in a range-bound fashion in the short term.

Coking coal prices moved higher this week, with Liulin low-sulfur primary coking coal up 223 yuan per tonne and Shanxi mid-sulfur primary material gaining 100 yuan per tonne. Imported Mongolian coal also rose, with raw coal prices up 5 yuan per tonne and washed coal up 94 yuan per tonne. The coking coal 2701 futures contract advanced 37 yuan per tonne. Supply remains constrained as mines prioritise safety; restart progress is slow and returning operations are running at reduced rates. Raw coal output at 523 sampled mines fell by 5,200 tonnes, and washed coal output declined by 4,400 tonnes to 628,200 tonnes per day, with production likely to stay at low levels. Imports via the China-Mongolia border are running at medium levels. Demand-side factors show high raw material prices and the fourth-round coke price hike narrowing losses for coke producers, though cash losses of around 90 yuan per tonne keep production enthusiasm moderate, with some independent plants at reduced loads. Supply of coke is expected to remain low near-term. Inventory data shows raw coal stocks at 523 sampled mines down 8,700 tonnes, washed coal stocks lower by 141,200 tonnes, independent coking plant coal inventories up by 240,300 tonnes, mill coal stocks ahead by 9,800 tonnes, and port inventories down 40,000 tonnes, bringing total coking coal inventories up by 111,500 tonnes. Given the slow pace of mine restarts, low border throughput, and constrained supply — with roughly 49 million tonnes of capacity still awaiting restart — combined with the fourth-round coke price hike reducing losses and modestly improving sentiment among coke makers, coking coal futures are likely to trade within a range. Some buyers still face difficulties sourcing high-grade primary coking coal.

Scrap steel: Reduced losses for short-process mills point to range-bound trading. Scrap prices rose across most regions this week, with the national scrap price index up 5 yuan per tonne to 2,185.8 yuan per tonne. Supply-side data shows daily scrap deliveries to 255 mills increased by 16,900 tonnes to 453,200 tonnes. Shredder processing plant operating rates declined, with both output and capacity utilisation easing. Demand strengthened, with daily scrap consumption at 255 mills rising by 8,200 tonnes to 470,100 tonnes. This included an increase of 2,700 tonnes at 89 short-process mills and 6,700 tonnes at 132 long-process mills. Meanwhile, capacity utilisation at 49 electric arc furnace plants fell 1.2 percentage points, while utilisation at 89 short-process mills rose 0.6 percentage points. Losses at short-process mills narrowed, with Jiangsu valley-power operations losing around 50 yuan per tonne and flat-power operations losing roughly 170 yuan per tonne. Inventory data shows long-process mill scrap inventories down 2.3 tonnes to 2.43 million tonnes, while short-process mill inventories increased by 76,000 tonnes to 1.34 million tonnes. All told, with modestly weaker end-user demand, rising mill capacity utilisation, and hot metal output up 2,200 tonnes per day to 2.3682 million tonnes, blast furnaces are consuming more scrap. Electric arc furnace utilisation has ticked up, boosting short-process scrap demand, and reduced losses for electric furnace producers support the view that scrap prices will likely consolidate in the near term.

Ferroalloys: Rising costs lift the price centre for both silicon manganese and ferrosilicon futures. Manganese ore prices have firmed, though supply-demand fundamentals remain somewhat loose. As silicon manganese prices stabilise and recover, producer operating rates are climbing. For the week ending September 4, weekly silicon manganese output rose 1.01% to 174,300 tonnes, marking a fourth consecutive weekly increase. Operating rates in Inner Mongolia and Ningxia have risen notably, with further production restarts and new capacity expected. Higher producer activity supports better manganese ore demand, and port ore prices have inched up this week. Still, manganese ore inventories remain elevated, capping upside for ore prices. Demand, however, is weak: weekly demand for silicon manganese at sampled steel mills fell 0.16% to 110,500 tonnes, a sixth consecutive weekly decline and at relatively low absolute levels. With futures prices rising, steel tender prices have also moved higher, with September tenders showing firmness. Inventory figures show stocks at 63 sampled silicon manganese producers edging down 500 tonnes to 451,500 tonnes as of September 4, though still 291,000 tonnes higher year-on-year and near record levels. Warrants and effective delivery notices have declined both week-on-week and year-on-year. In summary, improving sentiment across the ferrous complex and stronger cost support are offset by limited fundamental upside momentum, suggesting silicon manganese will trade in a modestly firm range driven by cost and sentiment factors. For ferrosilicon, coal prices have strengthened, with semi-coke prices rising week-on-week across Shaanxi, Ningxia, and Inner Mongolia to 1,100 yuan, 1,130 yuan, and 1,080 yuan per tonne respectively, up 260-280 yuan per tonne over two weeks. This has sharply increased immediate production costs, which rose by 240-310 yuan per tonne week-on-week, lifting the futures price centre. National ferrosilicon output for August was roughly 500,100 tonnes, down 1.28% month-on-month but up 1.38% year-on-year. Weekly data for the week ending September 4 shows production of 116,600 tonnes, up 1.39% week-on-week and a fourth consecutive increase. The rise in operating rates was driven mainly by Ningxia, where lower electricity costs improved margins and lifted utilisation by 1.61 percentage points to 44.43%. Steel tender prices have trended higher alongside futures, though demand at sampled mills inched up just 0.02% week-on-week to 17,900 tonnes, remaining at low levels for the past five years. Inventories at 60 sampled producers declined by 3,700 tonnes to 78,320 tonnes, while warrants and effective delivery notices have been gradually increasing. With production costs rising markedly and attention focused on cost and sentiment, ferrosilicon futures are expected to remain in a firm but cautious uptrend, though the duration and upside height warrant careful monitoring.