SMM HRC Daily: Futures Prices Stagnate, Supply-Demand Imbalance Low on First Post-Holiday Day

[SMM HRC Daily Review] On the first working day after the holiday, HRC futures prices were in the doldrums

On the first day after the holiday, the most-traded HRC futures contract exhibited sideways movement in a weak trend, with the "strong start" expectation dashed. It closed at 3196, down 0.19%. In the spot market, spot cargo shipments were generally average in most markets today. On the news front, the Caixin China General Services Business Activity Index (Services PMI) for April, released today, stood at 50.7, 1.2 percentage points lower than in March, marking the lowest level in seven months while still in the expansion territory. From the perspective of HRC fundamentals, as we enter May, there is an expectation of a slight increase in the impact from maintenance at steel mills compared to April. However, considering the recent weakening of cold-rolled orders and profit margins, some steel mills have already taken or plan to take actions to "switch from cold-rolled to hot-rolled" production. It is expected that domestic HRC supply will continue to fluctuate at a medium-to-high level in May. On the demand side, exports are expected to remain resilient in the short term, while domestic demand is projected to decline slowly. However, current inventory levels are relatively low compared to the same period in previous years. Overall, the imbalance between supply and demand in the HRC market is expected to remain low in the short term, and prices are anticipated to continue f