Iron ore coke coal ** last limit

It seems like the entire black industrial chain has seen a dramatic shift, with previously weak commodities now showing strong momentum. Coke and coking coal hit daily limits, iron ore closed at its upper limit, and rebar climbed by 2.53%. However, not all analysts are convinced that this is the start of a long-term bullish trend. Many believe the recent rally is more of a short-term profit-taking move, rather than a sign of stronger fundamentals.

At yesterday's closing, the main contract for coking coal was reported at 825 yuan/ton, up 3.9%, while the coke main contract rose to 1,216 yuan/ton, gaining 3.93%. Iron ore’s main contract reached 759 yuan/ton, climbing 3.97%, and rebar closed at 3,287 yuan/ton, up 2.53%. This sharp rebound caught many by surprise, as if a long-dormant bullish trend had suddenly awakened.

Recently, iron ore prices have been highly volatile, with sharp declines testing investors’ patience. According to Monday’s position data, seats such as CITIC were heavily adding to their positions in iron ore and coke, which may explain the rally on Tuesday. Analysts suggest that market sentiment has become overly pessimistic about coal and steel, and when bearish expectations are too uniform, a reversal is likely.

The rebar market saw a sharp rebound, but there hasn’t been any major change in the underlying fundamentals. A slight drop in inventory suggests some demand from the end users, but this is still attributed to seasonal factors. There’s no sign of unexpected demand. Rebar has been losing ground for over two months, so the room for further decline is limited, making a technical rebound reasonable. Still, overall market sentiment remains cautious, with little belief in a significant improvement in future demand. Spot prices are expected to rise only modestly.

Yesterday, the mining sector also saw a daily limit, with increased volatility in recent days. However, fundamentals remain weak, with rising stockpiles and no improvement in steel mills' financial conditions. It’s unlikely that mining activity will pick up significantly. In the earlier period, due to more mineral distribution, it’s possible that some steel companies bought more during the period, but this could lead to reduced spot purchases in the future. With the mine 1405 contract already trading above port spot prices, the steel mills’ buying behavior is likely to weaken. At this point, major capital operations are evident in the mining market, with repeated washouts and efforts to target retail investors. Without a fundamental improvement, the main funds are likely pulling up prices for better short-selling opportunities. If port spot mines haven't risen by more than 30 yuan/ton in the coming days, the market may revert to a bearish trend.

Analysts from the Guangzhou Sales Department of China International Commodities noted that the coke limit on Tuesday was mainly driven by restocking expectations. Recently, spot coke prices have continued to fall, with most coking plants operating at a loss. Coke inventories have been rising for several weeks, and the average inventory of coking plants below 1 million tons dropped by 24,400 tons to 15,900 tons. The supply-demand balance for coke has slightly improved. Meanwhile, the total inventory of coking coal in sample steel mills and coking plants fell to a level below average—9.956 million tons. If steel mills continue to increase production, a round of restocking for coking coal is likely. However, this temporary fix is unlikely to bring lasting stability to the market.