SMM daily comment on domestic HRC market (Aug 22)

SHANGHAI, Aug 22 (SMM) –

HRC futures prices closed up 0.98% at 3,917 yuan/mt today. According to SMM statistics, this week, the output reduction of molten iron caused by the blast furnace maintenance is estimated to be 938,400 mt, a decrease of 34,400 mt WoW. In terms of HRC, the output reduction caused by maintenance this week will be 154,400 mt, an increase of 71,900 mt WoW, and that of next week will be 103,500 mt, a decrease of 50,900 mt WoW. On the demand side, the terminal market didn’t shake off the impact of the off-season, so the upward trend of steel prices is weak. On the cost side, good profits and high production enthusiasm of steel mills led to a strong trend in iron ore prices. Affected by coal mine accidents, coke prices rose and cost support still exists in the short term. Today, China planned to allow local governments to issue 1.5 trillion-yuan special refinancing bonds, which will support urban investment platforms to resolve the current capital flow risks. The strength of the raw material side drove up costs, and the introduction of policies also led to a recovery in market sentiment, so it is expected that short-term HRC prices may hold steady.