HRC Prices Extend Rally, Market Is Anticipating Economic Stimulus From Chinese Government

SHANGHAI, Jun 2 (SMM) – HRC futures extended its rally today, closing up 2.68% at 3,722 yuan/mt. In terms of the spot market, the quotations of HRC in mainstream cities across the country generally rose today. Transactions in south China market were better than in east and north China. Affected by maintenance in north, central, east and north-west China, HRC output fell back this week. SMM statistics showed the social inventory of HRC in 69 warehouses nationwide totalled 3.25 million mt this week, a decrease of 5.48% from last week. End demand was released after HRC prices rebounded, driving down social inventories. HRC output may be largely stable in the short term amid modest profit margins. China’s May manufacturing PMI was in contraction territory. Market is expecting the Chinese government to introduce stimulus policies to boost economy. The 2310 HRC futures contract is expected to move between 3,600-3,830 yuan/mt in the short term.