SMM HRC Daily: Inventory Declines, But Futures Gains Insufficient

Published: May 22, 2025 18:20

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[SMM HRC Daily Review] Inventory Continues to Decline, but Futures HRC Gains Are Insufficient
Today, the most-traded HRC futures contract first rose and then fell, closing at 3,210, up 0.09%. In the spot market, intraday quotes were mainly stable, 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 remains low, with a slight decrease in the impact from subsequent maintenance, but the recovery pace is slow. In terms of demand, end-use demand remains resilient in the short term, and inventory in major cities continues 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, with cost support remaining 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.

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