SMM Daily Comment On Domestic HRC Market (Sep 5)

SHANGHAI, Sep 5 (SMM) – HRC futures fell near the end of today’s daytime session and closed at 3,906 yuan/mt, an increase of 0.69%. The quotations of HRC spots in domestic major cities dropped by 10-20 yuan/mt. According to SMM statistics, the molten iron production reduction caused by blast furnace maintenance this week will be 779,100 mt, a decrease of 96,700 mt WoW. The HRC production reduction caused by maintenance this week will be 39,600 mt, a decrease of 63,900 mt WoW, and the production reduction next week will be 59,400 mt, an increase of 19,800 tons WoW. Entering September, the demand market did not show the peak-season sentiment. Under the support of high molten iron output, iron ore prices are expected to remain strong. Besides, domestic coal mine accidents and shrinking overseas shipments will keep the short-term coke prices stable. Recently, many favorable policies introduced in China greatly boosted market confidence, but it will take time for the effects to appear. Given the fundamental situation, short-term HRC prices may fluctuate. Market participants need to be alert to the risk of demand recovery falling short of expectations.