SMM HRC Daily: Sluggish Macro Environment Leads to Weak Price Trends Next Week

Published: May 23, 2025 17:12

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[SMM HRC Daily Review] Macro environment remains sluggish; HRC prices expected to trend weaker amid stability next week
This week, the futures market fluctuated rangebound and remained in the doldrums. Spot market prices fell by 20-30 yuan/mt compared to last Friday, with overall market transactions being moderate during the week, mostly concentrated in the latter half. In terms of supply, additional maintenance affected some steel mills in north and east China this week, leading to a further decline in HRC production, which is already at a low level compared to the same period in previous years. On the demand side, downstream end-use demand remains resilient, with moderate trade shipments. Social inventory in large samples continued to decline, with the rate of decline expanding. By region, the reduction in east and north China markets outpaced that in south and central China, as well as north-east China. Meanwhile, in-plant inventory also declined slightly on a WoW basis. Currently, SMM's total HRC inventory stands at 4.187 million mt, down 222,300 mt WoW. On the cost side, pig iron has entered a cycle of peaking and pulling back, but remains in high-level fluctuations in the short term, with cost support remaining intact for now. Looking ahead at the supply and demand fundamentals, the impact from maintenance is expected to slightly decrease, but the recovery pace is slow, resulting in relatively small supply pressure in the short term. As the production pace of the manufa

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