[SMM Daily Review of Hot-rolled Coil] Inventory continues to decline, but the futures market's upward momentum is insufficient

Today, the most-traded HRC futures first rose and then fell, closing at 3,210, up 0.09%. In the spot market, quotations remained stable during the day, with an overall improvement in trading performance. In terms of supply, this week's HRC production was 3.2452 million mt, down 14,200 mt WoW. The short-term supply pressure remained low, and the subsequent impact from maintenance decreased slightly, but the recovery pace was slow. In terms of demand, end-use demand remained resilient in the short term, and the inventory in major cities continued to decline. This week, the total SMM HRC inventory was 4.187 million mt, down 222,300 mt WoW. On the cost side, pig iron production is expected to decrease but will fluctuate at highs, and cost support remains firm for now. In summary, HRC will continue to be in a de-stocking phase in the short term, but the upward driving force is still insufficient. The most-traded HRC futures contract may fluctuate rangebound at the current level in the short term, and the strategy of shorting on rallies remains unchanged.