Raw material volatility in China's steel market
Last week, the raw material market fluctuated slightly. Iron ore prices rose volatilely; the coking coal market remained generally stable; coking coal prices were stable with slight declines; and prices of various ferroalloys were stable with slight increases. The price changes of major commodities during this period are as follows:
Iron Ore Prices Fluctuated Upwards
Last week, imported iron ore prices rose initially and then fell, showing an overall upward trend. Inventories at major ports continued to rise, and the overall oversupply situation remained unchanged, with transaction volumes remaining relatively low. Steel mills maintained low inventory levels, and although a few mills replenished their stocks, the overall replenishment volume was not significant. Currently, the cost of resources delivered to traders is relatively high, and with the increase in storage fees at major ports starting January 1, 2026, traders are temporarily unwilling to sell at low prices. However,iron ore prices also lack upward momentum, and it is expected that imported iron ore prices will rise initially and then fall in the near term.
Domestic Metallurgical Coke Prices Remained Stable
Last week, domestic metallurgical coke prices remained generally stable. Starting January 1, 2026, coking plants in North China, East China, and Northeast China will implement the fourth round of price reductions for metallurgical coke, with a decrease of 50-55 yuan/ton. In Central and Southern China, monthly-priced coking plants are expected to lower metallurgical coke prices by 165 yuan/ton in January 2026. In Southwest China, steel mills with ten-day pricing will see a 50 yuan/ton decrease in metallurgical coke purchase prices in early January 2026. Supply of metallurgical coke is decreasing while demand is increasing. The capacity utilization rate of 200 independent coking plants decreased slightly by 0.05%; the blast furnace operating rate of steel mills increased by 0.39%, and the average daily output of molten iron increased by 15,500 tons, leading to a slight increase in demand for metallurgical coke. Total coke inventory in the industry chain decreased slightly by 2,000 tons, while the number of days of inventory available for steel mills remained unchanged. Metallurgical coke futures performed poorly, market competition intensified, and some steel mills intended to push for a fifth round of price reductions. However, coking plants are generally operating at a loss, and with coking coal prices expected to rebound after mid-January 2026, the acceptance of price reductions by coking plants is extremely low. The metallurgical coke market is expected to remain stable with a slight downward bias in the near term.
