Caixin Futures: Steel valuation declines, coking coal shows strong fluctuations, iron ore under pressure

⑴ Steel: Both supply and demand have declined, with total inventory shifting from decreasing to increasing, and supply-demand drivers weakening. On the capital side, the top twenty positions in the RB and HRB October contracts saw increases in both long and short positions, but short positions increased more, leading to a slightly bearish change in open interest. Technically, the RB October contract overall shows a trend of increased open interest with price drops. Pay close attention to the resistance near the 40-day moving average above and the support at the previous low near 3,136 below. In terms of valuation, the price of the RB October contract is comprehensively lower than the electric arc furnace valley electricity cost and long-process rebar cost in East China, so the market valuation is neutral to low. Overall, market sentiment has weakened due to tariff concerns. In the short term, the market is still caught between cost support and weakening supply-demand drivers. With comparatively low valuation, downside risk may be limited.⑵ Iron ore: On the supply side, iron ore arrivals at ports remain high, and as June marks the end of the Australian fiscal year, there are expectations for a shipping rush from mines. On the demand side, hot metal output has softened, resulting in weaker support for demand. Technically, the 09 contract continues its trend of increased open interest with price drops; focus on support around 750-765 below. On the capital side, the top twenty positions saw increases in both longs and shorts, but short positions increased more, reflecting a slightly bearish change in open interest. Overall, downstream steel demand is weakening, limiting support for raw materials. The pressure from high supply in June is about to materialize, so iron ore valuation may move down in the short term, and further downside may depend on the pace of hot metal output decline.⑶ Coking coal: Supply in production areas is being restored. In Shanxi, safety inspections have tightened, and output at some coal mines remains below pre-shutdown levels even after resuming, so overall supply remains tight. On the demand side, downstream procurement is active, with prices mainly rising. On the capital side, both long and short positions have increased among the top twenty, with a slightly larger increase in longs, leading to a slightly bullish change in open interest. Technically, the coking coal 09 contract shows a clear trend of rising prices with increased open interest; in the short term, watch for resistance at the previous high around 1,455 above, and support is now raised to around 1,405 below. All in all, actual supply is tight, and since June is the month for production safety, stricter safety inspections keep spot prices driven by strong fundamentals in the short term. However, attention should be paid to weak steel demand; high raw material prices are not easily passed on downstream, leading to a clear divergence in the industry chain. Be alert to volatility risk from capital outflow. It is recommended to maintain a long allocation across the industry chain without chasing high prices, and to focus on the recovery of production at Shanxi coal mines.⑷ Coke: Raw material prices have risen sharply, driving up spot costs for coking plants, with some forced to reduce production, leading to marginal decline in coke output. Currently, hot metal output is also declining marginally, resulting in slightly weaker rigid demand, but strong cost-side support keeps coking plants motivated to seek price increases. In terms of valuation, the market has already priced in the seventh round of spot price increases, so volatility risk needs to be noted.⑸ Silicomanganese: Manganese ore shipments are picking up, while port inventories of manganese ore continue falling. Plant operating rates remain at low levels, with a marked preference for negotiating lower manganese ore prices, so overall supply and demand remain weak and stable. Technically, the silicomanganese 09 contract closed with a bearish candlestick in a volatile pattern; watch for a breakout of the 6,000-6,120 price range.