SMM Daily Comment On Chinese HRC Market

SHANGHAI, Jun 29 (SMM) –HRC futures moved downwards after opening higher today, closing down 0.16% at 3,815 yuan/mt. In terms of the spot market, the quotations in mainstream cities across the country fluctuated in a narrow range, and the transactions weakened. From the perspective of the supply side, according to SMM statistics, some steel mills in East China have resumed production after completing overhaul. Other steel mills were active in production. However, some steel mills in north China will enter maintenance in July, which will cause HRC output to decline. End-user demand remained poor in the off-season. As a result, HRC stocks rose significantly.  From a macro point of view, China’s manufacturing PMI data for June will be released tomorrow. The domestic market still has expectations for favorable policies. With growing supply and weak demand, spot HRC market is much weaker than futures market. Fears of interest rate hikes by major central banks are growing. HRC prices may fluctuate wildly in the short term.