China HRC Monthly Supply-Demand Balance

SHANGHAI, Mar 1 (SMM) - Domestic HRC prices fluctuated upwards in January. After the restocking period ended, the transactions of HRC turned cold. However, the market sentiment was still strong and the spot prices increased further. But the prices fell rapidly after the Chinese New Year holiday due to the high inventory, slow recovery of demand and overseas inflation pressure. In the short term, due to the high raw material prices and the high costs of steel mills, the market players intended to hold the prices firm. In addition, on the macro front, with the optimisation of the pandemic prevention policy, the China’s consumption recovered obviously. And the market was generally optimistic about the medium and long-term development in 2023. Meanwhile, the sharp increase in export demand caused by high overseas prices provided support for the domestic steel prices. However, it will take time for the short-term demand to improve significantly. Considering that the output of HRC in February was higher than the level of previous years, the supply pressure may increase.