In the past 10 days, the global benchmark iron ore price (62% grade) has shown a stepwise increase, rising from $78.5/ton to $84.2/ton, with a cumulative increase of 7.3%, marking the largest weekly increase since the second quarter of this year. Among sub-categories, the lump ore premium (relative to fines) expanded to $15.8/ton, up 22% from the previous month, mainly driven by environmental protection policies in Tangshan, China. The local sintering production restriction ratio was raised to 30%, forcing steel mills to increase purchases of direct reduction raw materials such as lump ore and pellets. The daily consumption of lump ore in Tangshan area increased by 18% year-on-year this week.

Port inventory data shows that as of July 10, the total inventory of iron ore at 45 major ports in China was 132 million tons, a decrease of 2.1% month-on-month, declining for three consecutive weeks. On the international supply side, Rio Tinto Group's iron ore shipments in the first half of the year reached 168 million tons, a year-on-year decrease of 1.2%; Brazil's Vale saw its shipments drop 3.5% year-on-year to 142 million tons due to the prolonged rainy season, further strengthening expectations of tight supply.

This week, the global scrap steel market showed a pattern of "rising in the east and stable in the west". In the Asian region, the purchase prices of scrap steel by steel mills in Guangdong and Guangxi, China, increased by 40-60 yuan/ton cumulatively, among which the price of heavy scrap (thickness ≥ 6mm) in Foshan rose to 2,890 yuan/ton; the export price of scrap steel in the Kanto region of Japan remained stable at $420/ton (FOB), the same as last week. The European market remained weak, with the price of heavy scrap in the Ruhr region of Germany staying at 395 euros/ton, and demand continued to be sluggish due to the production reduction in the automobile manufacturing industry (European automobile production fell 5.7% year-on-year in the first half of the year).

Domestic data in China is more complex: the average daily consumption of scrap steel by 300 sample steel mills was 537,000 tons, a decrease of 0.83% month-on-month; while the arrival volume in Northeast and North China regions increased by 1.66% and decreased by 11.2% month-on-month respectively, intensifying the regional supply-demand mismatch. It is worth noting that the proportion of scrap steel used by short-process steel mills dropped from 45% to 42%, reflecting the suppression of raw material demand by the shrinking profit of rebar (current profit per ton of steel is about -120 yuan).

The main silicon-manganese futures contract rose 4.2% this week, driving the spot market quotation up to 7,350 yuan/ton (Mn65%), an increase of 2.1% from last week. Hebei Iron and Steel Group's July tender price for low-carbon ferromanganese (FeMn84C0.7) was set at 8,750 yuan/ton, with a purchase volume of 2,430 tons, an increase of 1.8% from the previous month's tender; a steel mill in East China's tender price for high-carbon ferromanganese (FeMn70) was 5,650 yuan/ton, with a purchase volume of 500 tons, hitting a new high in nearly three months.

The coke market ushered in a price increase window. The ex-factory price of quasi-first-class coke in Shanxi Province tentatively increased by 35 yuan/ton to 2,050 yuan/ton. The operating rate of coke enterprises remained at 78%, while the available days of coke inventory in steel mills dropped to 12 days, lower than the reasonable level (15 days), supporting the expectation of price increases.

The U.S. Department of Commerce announced on July 8 that it would impose a 50% tariff on all imported steel products, covering all categories such as plates and long products. This policy will affect the flow of about 45 million tons of global steel trade. Affected by this, the Southeast Asian steel import market saw panic buying, and the import price of hot-rolled coils in Vietnam jumped to $890/ton (CFR) this week, an increase of 6.2% from last week.

In contrast, the transportation bottleneck of iron ore in West Africa is expected to be broken. Ivanhoe Atlantic signed an $1.8 billion railway renovation agreement with the Liberian government. After the completion of the project, the annual iron ore transportation capacity in the region will increase from 12 million tons to 30 million tons. It is expected that after putting into operation in 2027, the global supply of high-grade hematite (67% grade) will increase by 5%.

The situation in Ukraine continues to affect the supply of steel raw materials in Europe. Its crude steel output in the first half of the year was 3.68 million tons, a year-on-year decrease of 4.9%. Among them, due to labor shortages (attrition rate exceeding 30%) in steel mills in the Donbas region, the capacity utilization rate was only 45% of the pre-war level, leading to an increase in Europe's dependence on scrap steel imports. Turkey's scrap steel exports to Europe increased by 17% year-on-year.

Analysts point out that the current steel raw material market is in a period of game between "cost support and weak demand". In the short term, iron ore and alloy prices may maintain high volatility, while the scrap steel market is unlikely to rise significantly due to the drag from the profit of finished products. As the traditional consumption peak season in the third quarter approaches, the global inventory destocking speed and adjustments in China's real estate policies will become the core variables of the market in the next stage.