[SMM Hot-Rolled Daily Review] Next Week's Coil Prices Are Still Expected to Fluctuate Upward, Focus on Demand Recovery

Without guidance from the futures market today, spot prices mainly declined by 10 yuan/mt. Supply side, steel mills' HRC profits remained moderate, maintaining strong production enthusiasm. According to the SMM survey, this month's daily average production is expected to increase MoM, keeping supply pressure high. Demand side, mainstream market participants gradually resumed work this week, but post-holiday downstream sentiment remained cautious, and demand recovery will take time. Looking ahead, on the raw material side, although coke prices are still expected to decline, iron ore prices are expected to strengthen due to disruptions from overseas shipment news, providing short-term cost support. On the demand side, end-use demand has entered a verification phase, and before being disproven, its impact on prices remains neutral. Overall, with positive macro expectations from the Two Sessions and cost support still in place, the downside space for HRC prices is limited. Next week, the most-traded HRC contract may fluctuate rangebound within 3,380-3,530.