CITIC Securities Futures: Cost Support Strengthened, Steel Futures Show Strong Performance

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Market Information:

1. The U.S. Axios news website reported on the 21st, citing anonymous sources that the Trump administration has begun planning talks with Iran, conducting preliminary negotiations through third parties. According to multiple Iranian media outlets including Mehr News Agency on the 22nd, an anonymous Iranian official told Lebanon’s Al-Ma’ariv TV that Iran has proposed six conditions for a ceasefire.

2. The UK government issued a statement that imports of steel exceeding the quota level will be subject to a 50% tariff, with the overall quota reduced by 60%. The tariffs will apply to imported steel products that can be produced in the UK, with the quota level decreasing from July 1.

3. International Shipbuilding News: From March 9 to 15, global shipyards received a total of 44+4 new ship orders. Chinese shipyards received 28+4 new orders, Japanese shipyards received 1, South Korean shipyards received 11, and shipyards in Italy and Turkey also secured new orders.

4. The real estate “growth control” policy has received a major update. The Ministry of Natural Resources and the National Forestry and Grassland Administration recently issued the “Notice on Further Ensuring Natural Resource Elements,” which clarifies that newly added construction land generally will not be used for commercial real estate development. Experts say this marks the end of an era of large-scale land addition for real estate development, opening a new cycle focused on stock enhancement, urban renewal, and public welfare.

5. According to Mysteel’s incomplete statistics, last week (March 9-15), the total area of newly signed commercial housing transactions in 10 key cities was 1.4775 million square meters, up 46.5% week-on-week but down 4.5% year-on-year.

6. The China Association of Automobile Manufacturers released data showing that from March 1-15, retail sales of passenger cars nationwide totaled 561,000 units, down 21% year-on-year but up 2% month-on-month. Cumulative retail sales this year reached 3.14 million units, down 19% year-on-year.

7. According to the Century Building Survey, as of March 18 (the 30th day of the lunar new year), 10,692 construction sites across the country had a reopening rate of 62%, up 19.5 percentage points from the previous period, but down 2.62 percentage points compared to the lunar year. The labor employment rate was 61.7%, up 17.8 percentage points, steady year-on-year. The funding in place rate was 50.7%, up 7.9 percentage points, and up 1.6 percentage points year-on-year.

8. Last week, the supply of five major steel products totaled 8.3982 million tons, an increase of 188,500 tons week-on-week; total steel inventory was 19.4623 million tons, down 286,600 tons. Steel mill inventory was 5.3521 million tons, down 164,000 tons; social inventory was 14.1102 million tons, down 122,600 tons. Among these, rebar total inventory decreased by 47,600 tons to 8.8941 million tons, with apparent demand increasing by 312,800 tons to 2.0809 million tons. Hot-rolled coil total inventory decreased by 103,000 tons to 4.6129 million tons, with apparent demand increasing by 151,500 tons to 3.1051 million tons.

(Chu Xinli, Futures Trading Consulting Industry Info: Z0018419, for reference only)

Rebar:

In terms of industry data, last week rebar production increased by 80,300 tons to 2.0333 million tons, factory inventory decreased by 34,200 tons, and social inventory decreased by 13,400 tons to 6.5321 million tons. After the end of northern blast furnace restrictions, expectations for restart in long-process steel mills are strong, while short-process mills are also accelerating production. Short-term steel supply still has room to grow, which may limit price increases. With the traditional “March-April” peak season approaching, market expectations for future steel demand remain positive. Raw material costs such as iron ore and coking coal remain firm, supporting steel costs, and prices are expected to fluctuate.

(Chu Xinli, Futures Trading Consulting Industry Info: Z0018419, for reference only)

Hot-Rolled Coil:

Last week, hot-rolled coil output rose by 49,500 tons to 3.0021 million tons, total inventory decreased by 103,000 tons to 4.6129 million tons, and apparent demand increased by 151,500 tons to 3.1051 million tons. As the traditional peak season approaches, market expectations for future steel demand remain positive. Social inventory is beginning to clear, and subsequent inventory digestion should be monitored. Raw material costs such as iron ore and coking coal remain firm, supporting prices, which are expected to continue fluctuating.

Strategy: For rebar contract 2605, focus on the 3100-3200 range; for hot-rolled coil contract 2605, focus on 3250-3350.

(Chu Xinli, Futures Trading Consulting Industry Info: Z0018419, for reference only)

Ferrous Alloys: Manganese ore costs remain strong

Viewpoint: Neutral

Profit margins are gradually stimulating supply. Weekly silicon iron production has increased significantly, while silicon manganese production remains stable but with reduced losses, opening the window for increased output. High prices are still encouraging factories to transfer inventories to delivery warehouses. Silicon iron warehouses are increasing, and silicon manganese companies are actively selling. On the demand side, downstream acceptance of high prices is limited, but steel mills are entering a recovery cycle, gradually improving consumption. Overall, supply and demand still limit alloy prices from falling, maintaining high-level oscillations. However, a hurricane passing through Groot Island has raised concerns about manganese ore supply, similar to April 2024, when silicon manganese prices surged sharply and hit new highs on Friday. Next week, focus on whether the island’s facilities are severely damaged after the hurricane. If unaffected, prices may return to high-level oscillation; if significantly damaged, prices could spike again. In the short term, silicon iron May contract support is 5600-5700 yuan/ton, silicon manganese May contract support is 5950-6050 yuan/ton.

Viewpoint: Continue holding out-of-the-money put options at strike 4, and bullish put options at the highest strike.

(Zhang Shaoda, Futures Trading Consulting Industry Info: Z0017566, for reference only)