🔹 Market Overview

Yesterday’s day session was largely range-bound, but the night session turned weak, led by a sharp drop in coking coal (-2.43%). From both technical and capital flow perspectives, coking coal remains in a downward trend, continuing to dictate short-term sentiment across the black commodities complex.

🔸 Macro and Structural Insights

  • The current phase appears to be the late-stage of a rebound cycle, with limited upside and increasing downside risk.
  • We maintain close watch on two critical trend-reversal windows:
    • This Thursday (Steel Union data release)
    • Next Thursday (cycle inflection point)

🔸 Supply-Demand Landscape

  • Hot metal output remains steady above 2.4 million tons/day, and steel mills still hold profit margins, meaning no forced production cuts — yet.
  • Demand resilience in sectors like military, shipbuilding, and wind power continues to support spot prices and provides a floor for iron ore.
  • However, should demand momentum weaken in coming weeks, downside space opens up considerably, especially since the industry has not entered the loss-making phase.
  • A true bottom will likely emerge only when mill losses trigger meaningful production cuts.

🔸 Strategy Brief

We believe the next leg of the downtrend will start once marginal changes in the supply-demand relationship appear. Until then, maintain a sell-on-rally approach.

Resistance zone to watch: 3000–3050
Suggested action: Build short positions near resistance, manage risk with tight stops.

📌 Daily insights provided by LangZo Steel. For reprints, please credit LangZo Steel.