20260707-国泰君安期货-2026_Mid-Year_Report_Release_Ferrous_Market_Outlook_Investmen_7页_1mb

2026 Mid-Year Report Summary: Ferrous Market Outlook & Investment Strategy

Disclaimer

• The views and information in this report are for the reference of Guotai Junan Futures' professional investors.
• Access to this report cannot be restricted, and it is not intended for non-professional investors.
• This report does not constitute investment recommendations or financial advice. Investors should make their own decisions based on their risk tolerance.

Core Content Overview

Steel Market Outlook

• Supply-Demand Dynamics: Supply and demand pressures will persist in the second half of 2026, but cost factors are expected to diverge.
• Demand Side:
  • Manufacturing demand has shifted from passive to active inventory replenishment due to improved industrial product price indices and enterprise profits.
  • Real estate speculative demand remains weak, and new construction will not bottom out in 2026.
  • Infrastructure investment growth has slowed, and the structure has shifted toward new productive forces and technologies.
  • Steel exports remain resilient, but the net export volume is a balance between price and quantity.
• Supply Side:
  • Global crude steel production is likely to see a slight decline with regional differentiation.
  • China's production will continue to decline, but the rate may slow.
  • India and Vietnam will maintain positive production growth due to infrastructure investments.
• Price Outlook: Prices will fluctuate at lower levels, with policy changes and macroeconomic events likely to amplify short-term volatility.
• Key Risks:
  • Upside Risk: Global manufacturing sector's inventory replenishment.
  • Downside Risk: Economic crisis triggered by the Federal Reserve's interest rate hikes.

Iron Ore Market Outlook

• Market Transition: The market will shift from "price supported by high demand and abundant supply" to "supply fulfillment and inventory accumulation exert downward pressure".
• Supply Side:
  • Supply growth is more extensive, with major mines (including Vale, Rio Tinto) contributing to output.
  • Projects like Simandou and ONSLOW have moved from expectations to actual supply.
  • Non-mainstream mines show faster shipment growth.
• Demand Side:
  • Demand for necessities still supports prices, but active restocking is limited due to declining steel mill profits.
  • Sheet product demand and exports remain resilient, but incremental growth has slowed.
  • If profit pressure spreads to maintenance and production cuts, demand support for iron ore prices may weaken.
• Key Risks:
  • Overseas weather disruptions, geopolitical conflicts, and slow project ramp-up.
  • Weather disturbance is the key variable affecting prices.

Coking Coal & Coke Market Outlook

• Supply-Demand Equilibrium: The market is approaching a weak balance, with supply constraints and rigid demand.
• Supply Side:
  • Domestic coal supply is constrained by security checks and high customs clearance imports.
  • Supply elasticity may be low, with slow recovery expected from Q3.
  • Mongolia and Russia are core import sources, but substitution effects may be limited due to coal blending ratio and transportation capacity.
• Demand Side:
  • Price signals suggest the bottom of the cycle has been reached.
  • Demand is resilient but unlikely to significantly increase.
  • Coal chemical production expansion and high electricity consumption continue to support demand.
• Key Risks:
  • Domestic production resumption exceeding expectations.
  • Marginal impact of imported coal intensifying.
  • Positive sentiment from industrial policies.
  • Geopolitical disturbances, inconsistent Indonesian policies, and weather performance below expectations.
  • Weather disturbance is the key risk factor.

Thermal Coal Market Outlook

• Price Range: The core operating range of 5500K thermal coal at northern ports is expected to be 700-900 yuan per ton, with an annual spot average price center of 750-800 yuan per ton.
• Market Dynamics:
  • Supply and demand are approaching a weak equilibrium.
  • Long-term contracts lock in most liquidity, making marginal changes the main driver of price fluctuations.
  • Positive factors in the first half (Indonesian policy adjustments, US-Iran conflict, thermal power demand, and reduced off-balance-sheet production) have weakened.
• Key Risks:
  • Geopolitical disturbances.
  • Inconsistent Indonesian policies.
  • Weather performance below expectations, especially summer high temperatures and flood season hydro-power output.

Ferroalloys Market Outlook

• Price Drivers: Prices will continue to be supported by costs and constrained by supply and demand.
• Market Differentiation:
  • Manganese Silicon: Rebound height may be limited due to supply resilience and inventory pressure in low-cost production areas.
  • Ferrosilicon: Non-steel demand and steel premiums provide stronger support, but supply pressure remains.
• Investment Strategy:
  • Manganese Silicon: Bearish rebound or range-bound strategy.
  • Ferrosilicon: Focus on cost and spot support after correction.
  • Arbitrage Opportunities: Monitor the convergence of price spreads between manganese silicon and ferrosilicon if no new strong disturbances occur.
• Key Risks:
  • Overseas shipment of manganese ore and mine disturbances exceeding expectations.
  • Unexpected fluctuations in carbon element sentiment.
  • Unexpected changes in demand for molten iron and steel.

Key Analysts

• Yafei Li (Chief Analyst, Administrative Head of Ferrous Metals Research)
• Yuwu Liu (Senior Analyst)
• Yuanyuan Fan (Analyst)
• Yuanyuan Jin (Analyst)

Summary of Investment Strategies

• Steel Products: Monitor policy changes and macroeconomic events, with a focus on demand resilience and cost divergence.
• Iron Ore: Expect price decline due to inventory build pressure, with demand support from necessities.
• Coking Coal & Coke: Watch for supply constraints and import dynamics, with policy monitoring crucial.
• Thermal Coal: Price will remain in a range-bound pattern, with weather as a key risk factor.
• Ferroalloys: Differentiate between manganese silicon and ferrosilicon, with ferrosilicon showing stronger fundamentals.

Conclusion

The second half of 2026 will see continued supply-demand pressures across the ferrous market, with cost factors playing a key role in price movements. Macro risks, including interest rate hikes and geopolitical tensions, will influence volatility. Weather and policy changes are critical variables that may impact market outcomes. Investors should remain cautious and focus on fundamental analysis and risk management.