[SMM HRC Daily Review] Rumors of Production Restrictions Repeatedly Hyped, Beware of Sentiment Fading and Price Corrections

There was no futures market guidance today. However, influenced by the rally in the night session on Friday, spot prices surged significantly in the morning session today. As trading performance was average in the afternoon, prices were adjusted slightly downward. In terms of supply, there were still relatively few new rolling line maintenance activities at steel mills, and HRC supply fluctuated at a high level. Demand side, despite the high spot prices today, end-users remained relatively cautious, with a robust wait-and-see sentiment, and the overall demand release was prudent. Cost side, steel mills may have expectations of raw material restocking before the holiday, but with limited increases in pig iron production, the support from raw materials is neutral. Overall, the fundamental imbalance in the HRC market is relatively small, and there are still expectations for end-user restocking before the holiday. "Rumors of production restrictions" have been circulating in the market, with their authenticity difficult to discern. In the short term, it is advisable to view this as an improvement in sentiment, rather than excessively chasing long positions, and to be cautious of a sentiment retreat and a return to lower levels.