[SMM Hot-rolled Daily Review] Optimistic sentiment fades, short-term futures rebar rally faces greater difficulty

Today, the most-traded HRC futures contract declined and closed at 3207, down 1.02%. In the spot market, intraday quotes fell by 10-20 yuan/mt, with overall trading performance remaining weak. In terms of supply, the impact from maintenance on hot-rolled coil production this week was 226,200 mt, up 15,200 mt WoW. Short-term supply pressure is expected to continue easing. In terms of demand, end-use demand remains resilient in the short term, and overall inventory is likely to continue destocking. On the cost side, iron ore prices are still expected to remain strong, while coke prices have started to decline. The cost support for HRC remains stable for now. On the macro side, real estate data for April remained weak, with significant YoY declines in steel-related investment and new construction starts. In summary, the fundamental imbalance in the HRC market is not yet apparent. The optimism brought about by the earlier suspension of tariffs has faded somewhat, and there is still uncertainty regarding the increase in subsequent demand. In the short term, the most-traded HRC futures contract may fluctuate rangebound at its current level.