SMM HRC Daily: Futures Fluctuate, Inventory Decline Narrows, Prices Sideways

[SMM HRC Daily Review: Futures Market Rose Before Falling, HRC Inventory Decline Continued to Narrow]

HRC futures rose before falling during the day, with the most-traded contract closing at 3,428, up 0.18% MoM. The futures market fluctuated rangebound, but market trading sentiment was moderately weak, with downstream end-users showing strong wait-and-see sentiment, leading to a divergence in HRC transaction markets.

On the macro front, the State Council raised the capital ratio for special bond projects to 30%, expanding the scope to include the digital economy, low-altitude economy, and others.

From a fundamental perspective, according to SMM's weekly balance data, steel mill maintenance in east and north China ended this week, leading to a rebound in HRC production. By region, HRC social inventory showed a buildup in north China, while other markets experienced inventory declines. In-plant inventory saw some accumulation, and the overall inventory decline continued to narrow, indicating that the inventory turning point is approaching.

In summary, considering that fundamental imbalances are not yet prominent, HRC prices are expected to remain in a sideways movement in the short term.