[SMM Daily Review of Hot-rolled Coil] Futures prices pulled back after hitting the peak, and may continue to be in the doldrums in the short term

Today, the most-traded HRC contract peaked and then pulled back, with the 2510 contract closing at 3080 in the final trading session, down 0.87% MoM. The spot price decreased by 10-30 yuan/mt. In terms of supply, HRC production increased by 77,100 mt this week, and supply pressure rebounded rapidly. On the demand side, seasonal characteristics of demand have emerged, with purchasing as needed being the main trend. In terms of raw materials, pig iron output may continue to decline in the short term, and there are still expectations for four rounds of coke price cuts. The cost support for HRC has slightly weakened. Overall, as mentioned yesterday, the favourable macro sentiment brought about by the China-US talks has largely dissipated, and the market has once again returned to the fundamental logic of the off-season. There are still expectations for an increase in HRC supply, while inventory has begun to accumulate in some markets in the north and south. It is expected that HRC prices will be in the doldrums in the short term.