[SMM Analysis] HRC Price Center Expected to Edge Lower in July

Published: Jun 25, 2026 15:46

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In June, steel prices were affected by the simultaneous weakening of end-use demand and cost support. HRC futures and spot prices moved sideways before trending lower, with the most-traded contract's monthly average price down 1.85% and SMM's national HRC monthly average spot price down 1.93%.

In terms of fundamentals, SMM's latest survey shows that this week, HRC social inventory at 86 warehouses nationwide (large sample) tracked by SMM reached 4.2912 million mt, up 64,500 mt WoW (+1.53% WoW) and up 39.78% YoY on a lunar calendar basis. By region, inventory buildup in northeast, central, and north China exceeded that in east China, while south China reported slight destocking. Recent transactions were sluggish, with soft market deals, leading to a slight accumulation of steel inventory.

Looking into July, supply side, according to the latest SMM intelligence, there are currently few new HRC maintenance shutdowns at steel mills, and domestic HRC production schedules for July are expected to edge up from June.
Demand side, given that Q2 remains in the off-season for domestic consumption, downstream procurement and market deals are subdued. Inventory pressure is expected to mount from July, with supply-demand imbalances gradually building. HRC's own supply-demand pattern will provide limited support to prices.
Cost side, market views on coal and coke price trends are currently divergent, while iron ore prices are expected to still have downside room. Overall, as HRC's supply-demand imbalances gradually build, it becomes harder for costs to rise further. Considering limited macro and external stimulus for steel prices, HRC prices in July are expected to hover at lows tracking the cost trend, with the average price potentially edging lower.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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