HRC Futures Decline, Spot Prices See Sideways Movement Amid Supply-Demand Dynamics

Today, the most-traded HRC futures contract fluctuated downward, closing at 3,377 with a decline of 1.32%. In the spot market, HRC prices fell during the day, and market transactions weakened. This week, HRC spot prices experienced sideways movement.

On the fundamentals, the number of hot-rolling production lines under maintenance at steel mills increased this week, leading to a decline in HRC production and reduced supply pressure. Some downstream end-users conducted slight restocking in preparation for the Chinese New Year holiday, resulting in a relatively small overall imbalance in fundamentals.

Looking ahead, on the cost side, coke prices are not expected to decline next week, and restocking by steel mills is expected to provide cost support. Considering that the macro stimulus policy window has not yet opened and HRC inventory remains in a destocking phase, the fundamental imbalance for HRC remains relatively small. The most-traded HRC futures contract is expected to continue sideways movement next week.