[SMM HRC Daily Review] Spot Transactions Improved; Futures Coil Expected to Stabilize?

The most-traded HRC futures contract extended its decline today but began to rebound near the close, settling at 3,313 yuan, down 0.58%. On the spot side, HRC prices fell mainly by 10-20 yuan/mt during the day. Supply side, HRC production this week increased significantly by 98,600 mt WoW, leading to greater supply pressure. Demand side, futures showed a weak trend, with downstream end-use demand remaining cautious. Coupled with the approach of year-end, the seasonal weakening of downstream demand is hard to reverse. Total inventory this week stood at 4.219 million mt, up 67,800 mt WoW. In summary, the fundamental imbalance in the HRC market is gradually accumulating. However, the overall accumulation has not exceeded expectations. With bearish sentiment partially digested, the downside for the most-traded HRC futures contract is expected to be limited in the short term, and prices may stabilize after bearish sentiment is fully absorbed.