[SMM HRC Daily Review] Fundamentals not yet sharply contradictory, HRC prices hold up well

Today, HRC futures exhibited an inverted "N"-shaped trend, with the most-traded contract closing at 3,123, marking a daily increase of 0.12%. In terms of supply, the impact from maintenance on hot-rolled coil production further decreased this week, leading to an increase in HRC supply pressure. Demand side, end-use demand from the manufacturing sector remained relatively resilient, but signs of seasonal decline also emerged. In terms of exports, last week, SMM steel port departures reached 3.1468 million mt, up 21% MoM, with steel port departures in June maintaining a high level. Cost side, the impact of environmental protection-driven production restrictions on coking coal has weakened, potentially reducing support for furnace charge. However, there is still an expected increase in pig iron production from blast furnaces, so the support for furnace charge may not collapse in the short term. Looking ahead, the fundamental contradictions in the HRC market are still in the accumulation phase, but inventory pressure remains at a low level compared to the same period in previous years. Coupled with the steady and positive improvement in cost support, it is expected that the most-traded HRC futures contract will continue to hold up well in the short term.