SMM daily comment on domestic HRC market (Aug 30)

SHANGHAI, Aug 30 (SMM) – HRC futures fluctuated and closed at 3,870 yuan/mt today, an increase of 0.39%. In the spot market, HRC quotations in mainstream cities across the country rose. According to SMM statistics, the blast furnace operating rate was 93.16%, an increase of 0.45 percentage point WoW. The average daily molten iron production of sample steel plants was 2.2488 million mt, an increase of 9,700 mt WoW. From the demand side, while the peak season of the downstream market is drawing near, overall performance was still weak. The willingness of the terminal to keep inventory at a low level remains unchanged, and the imbalance in the fundamentals of HRC are still obvious. On the cost side, the fundamentals for iron ore remain healthy in the short term, supporting HRC prices. There are rumors today that a number of banks have formulated plans to reduce the interest rate of existing mortgages. Meanwhile, Guangzhou officials announced the implementation of “Issue loans based on housing ownership”, which may boost the market, but the short-term effect is difficult to show. Last weekend, many places issued crude steel production cap implementation plans. In the follow-up, attention should be paid to the progress of relevant policies and demand side in the transition to the peak season, as well as China’s official manufacturing MPI due on August 31 Short-term HRC prices may still fluctuate in a wide range.