SMM HRC Daily Review: Tariff Hike Pressures Futures Lower, Supply Rebounds Amid Waning Demand

【SMM HRC Daily Review】Tariff Hike Pressures HRC Futures Lower

HRC futures prices weakened significantly this week, with a WoW decline of nearly 3%. On the fundamental side, as production profits continued to improve, steel mill maintenance plans decreased notably, leading to a substantial increase in HRC supply. Spot market prices averaged a WoW drop of 100-150 yuan/mt. With escalating international trade conflicts, market pessimism persisted, and downstream just-in-time procurement dominated. Although inventory continued to decline, the rate of decrease narrowed significantly, with total HRC inventory at 5.2555 million mt, down only 17,300 mt WoW. Looking ahead, as the international trade situation worsens and export investigations tighten, medium and long-term HRC exports are expected to weaken marginally. Meanwhile, HRC supply continues to rebound, demand has peaked and is pulling back, and the risk of pig iron production peaking is gradually increasing, putting overall pressure on the industry chain. In the short term, a strategy of sideways movement in the doldrums is recommended. Subsequent focus should be on marginal changes in export demand and domestic macro policy measures. The HC2510 contract is expected to fluctuate rangebound between 3,150 and 3,300 next week.