SMM daily comment on HRC market (Aug 9)

SHANGHAI, Aug 10 (SMM) –

HRC futures market rolled over yesterday, closing down 0.35% at 3,964 yuan/mt. In terms of spot market, major offers for HRC mostly remained unaltered yesterday. The average operating rate of BFs was up 0.3 percentage point at 92.57% as of August 9, SMM Statistics showed. The daily average pig iron production of sample steel mills was 2.2294 million mt, an increase by 10,100 mt. Currently, purchase aimed to meet rigid terminal demand, while export of steel products in July was 7.308 million mt, a five-month low. HRC market saw unbalanced supply-demand fundamentals. Improvement to domestic CPI and PPI unveiled sufficient production and pick-up of demand of some industries in China, while demand from outside China weakened. Under such circumstance, unbalanced supply-demand fundamentals were reported. In addition, the implementation of production restrictions will be monitored, but the exact time was yet to be discussed. With cost supports against weaker fundamentals, HRC market will largely swing widely on the near-term horizon.