Latest Update in the SMM Market

[Market transactions remain sluggish, and the phenomenon of refusing to budge on prices is widespread in the grain-oriented silicon steel market]. Looking ahead to the subsequent market, given the steel mills' firm determination to refuse to budge on prices, it is expected that the possibility of a significant price drop in grain-oriented silicon steel in the short term is relatively small. It is anticipated that the price of grain-oriented silicon steel in Shanghai will remain in the doldrums next week.

[Strong Willingness to Refuse to Budge on Prices, Non-Oriented Silicon Steel Prices Unlikely to Drop Next Week] This week, the futures market for ferrous metals series fluctuated rangebound, with HRC prices showing narrow fluctuations. Cost side, changes were relatively small, having limited impact on the non-oriented silicon steel market. Fundamentally, both state-owned and private producers have production lines entering the debugging phase, potentially further increasing the supply of non-oriented silicon steel resources. Spot liquidity for some grades was insufficient, and traders slightly lowered prices last week to facilitate smooth shipments. This week, there was a strong willingness to refuse to budge on prices, but market transactions continued the weak trend from last week. The off-season impact gradually became evident, with end-user motor orders being average, leading to cautious purchasing of raw material silicon steel and a heavy wait-and-see sentiment, with low restocking willingness. Looking ahead, the degree of supply looseness for non-oriented silicon steel may further expand, suppressing market confidence. However, steel mills have a strong willingness to refuse to budge on prices, coupled with active production cuts, making it difficult for prices to significantly decline in the near future.

[Fierce market competition may lead to a slight decline in the price of grain-oriented silicon steel next week] Looking ahead, the pressure on the supply side will continue to emerge. With the production release of enterprises such as Baowu Group and Shougang Group, there will be significant inventory pressure. Although there is policy support on the demand side, the actual conversion of orders takes time, making it difficult to reverse the off-season pattern in the short term. Overall, it is expected that the price of grain-oriented silicon steel will be in the doldrums next week.

[Imbalance Eased After Price Reduction; Non-Oriented Silicon Steel Expected to Operate in the Doldrums Next Week] This week, the outcome of the Sino-US tariff negotiations exceeded market expectations, with the ferrous metals series futures market strengthening. However, it showed a trend of pulling back towards the end of the week, providing limited positive impact on the market. In terms of fundamental conditions, Baowu announced its tender price, which remained flat. However, both state-owned and private producers have production lines entering the commissioning phase, potentially leading to a further increase in the supply of non-oriented silicon steel resources. The spot liquidity of some grades is insufficient. To facilitate smooth shipments, traders slightly reduced prices. As the market has entered the off-season, downstream end-user motor users are cautious, with a strong wait-and-see sentiment and low willingness to replenish high inventory levels, primarily purchasing on demand. Looking ahead, the supply of non-oriented silicon steel is expected to remain relatively loose, suppressing market confidence.

["[Fierce Market Competition: Prices of Grain-Oriented Electrical Steel May Start to Decline Slightly Next Week] Tariff news continues to impact the grain-oriented electrical steel market, particularly in terms of exports. Some export supplies may be diverted to domestic sales, leading to further relaxation of domestic supply. Currently, there is an abundant supply in the market, and the off-season is gradually approaching. Downstream transformer enterprises are cautious in purchasing grain-oriented electrical steel, mainly purchasing as needed. State-owned steel mills maintain firm prices due to their product quality, while some private steel mills, in order to sell their products, have room for negotiation on transaction prices."]

[Tariff Negotiations Unlikely to Meet Market Expectations; Prices of Non-Oriented Silicon Steel May Fall Slightly Next Week] This week, black futures have shown a trend of being in the doldrums, and the impact of mutual tariff impositions between China and the US has gradually emerged, with overall market transactions remaining weak. On the fundamental side, Baowu's tender price has not yet been announced. State-owned enterprises have barely managed to keep their quotes stable, but some private steel mills have gradually resumed production, leading to an increase in resource supply. To facilitate smooth sales, prices have been slightly lowered. Downstream terminal motor users remain cautious, as the market has already entered the off-season. Coupled with the impact of China-US tariffs, procurement strategies have become more conservative, with low willingness to replenish high inventory levels, and purchases are mainly made on a need-based basis. Looking ahead, despite China's agreement to negotiate with the US, both sides have adopted a tough stance. It is expected that the negotiation results will be unlikely to meet market expectations, and in the short term, tariff-related news will continue to exert a negative impact. The direct export of non-oriented silicon steel and the export of downstream motor enterprises will continue to face obstacles.