SMM Daily Comment On Domestic HRC Market (Sep 12)

SHANGHAI, Sep 12(SMM) – HRC futures prices rose slightly and the most-traded contract closed up 1.52%. Spot market quotations increased by 10-30 yuan/mt, and the transactions in South China were slightly better than those in East China and Northern markets. Driven by good profits and orders, domestic HRC production was unlikely to fall significantly in mid-to-late September. On the demand side, the current downstream purchases were still cautious, and HRC prices were affected by both oversupply and the pace of demand recovery. SMM believes that in the short term, driven by macro expectations, raw material support, and other factors, HRC futures will fluctuate strongly. If peak season demand is difficult to improve, HRC inventory accumulation caused by high supply will drag down prices. Steel mills may be forced to reduce production after profits are squeezed, so players need to be alert to negative feedback.