[SMM Analysis] Prices Pulled Back During the Week, Ningbo HRC Inventory Began to Build Up

Published: Jan 10, 2025 19:36

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[SMM Analysis: Prices Pulled Back During the Week, Ningbo HRC Inventory Began to Build Up] According to the SMM survey, this week SMM Ningbo HRC large-scale inventory stood at 226,500 mt (as of January 8), up 16,000 mt WoW.

[SMM Analysis] Prices Pulled Back During the Week, Ningbo HRC Inventory Began to Build Up
According to the SMM survey, this week, the large-scale inventory of HRC in Ningbo stood at 2.265 million mt (as of January 8), up 16,000 mt WoW.
This week, HRC futures weakened, with prices continuing to decline. Only on Friday, influenced by macro news regarding bond swaps, did prices slightly rebound, rising by 0.09%. As of the afternoon close on January 10, the most-traded HRC 2505 futures contract settled at 3,312 yuan/mt.
Spot prices in major cities also showed a downward trend this week, with prices decreasing by 30-120 yuan/mt WoW. Today, driven by the rise in futures, trading sentiment in most markets was moderate, and HRC transactions slightly improved compared to earlier this week.
According to the SMM survey, in the Ningbo spot trading market this week, transaction prices of mainstream HRC resources fluctuated downward. As of the afternoon of January 10, late-session spot quotes were at 3,370-3,380 yuan/mt, down 70 yuan/mt from last Friday's 3,440 yuan/mt.
Overall, HRC transactions this week were at a moderately low level, with Friday's transactions improving compared to the weekly average. Meanwhile, Ningbo HRC inventory began to build up this week, aligning with previous expectations. Currently, mainstream contract volumes have gradually arrived, and with the Chinese New Year approaching, traders showed a strong sentiment to stand firm on quotes. Market research revealed that most traders were not keen on restocking before the holiday, focusing more on post-holiday operations. Therefore, Ningbo HRC inventory is expected to continue building up next week.

This week, SMM released weekly balance data from its survey. Some steel mills resumed production after maintenance, leading to a significant increase in HRC production this week. As the year-end approaches, coupled with several days of weak futures, end-user purchasing enthusiasm has noticeably declined, resulting in a buildup in social inventory. Looking ahead, according to the latest SMM survey, HRC production this month has increased MoM. In the short term, HRC supply pressure remains high. With the year-end approaching, manufacturing demand is further weakening, and nationwide inventory is expected to continue building up next week.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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