[SMM HRC Daily Review] Demand weakens seasonally, HRC prices expected to remain in the doldrums

This week, HRC prices first rose and then fell, fluctuating rangebound within a certain range. The market trading atmosphere improved, with weekly transaction volumes being moderate. In terms of supply, the impact from maintenance in the hot-rolled sector decreased this week, leading to an increase in HRC supply. On the demand side, major automakers issued statements committing to "payment terms not exceeding 60 days," reducing the credit risk in the automotive industry, accelerating trade payments, and increasing the willingness to purchase, thereby increasing apparent demand. In terms of inventory, SMM statistics showed that the social inventory of HRC in 86 warehouses nationwide was 3.0577 million mt this week, down 12,300 mt MoM, or 0.4% MoM, indicating a slight decline in nationwide social inventory. On the cost side, coke prices remained stable this week, while iron ore prices adjusted downward within a narrow range, resulting in unstable cost support. Looking ahead, the impact from maintenance in the hot-rolled sector is expected to decrease further, with supply showing an increasing trend. However, with the arrival of high temperatures and rainy weather, demand is expected to weaken seasonally. Additionally, there is an expectation of coke price declines, and cost support is expected to continue to weaken. Next week, the most-traded HRC futures contract may remain in the doldrums within the 3000-3120 range, and the expectation of HRC prices in the doldrums remains unchanged.