[SMM HRC Daily Review] Will cost disruptions be limited? HRC prices fluctuate at highs

Published: Jul 1, 2025 17:21

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Today, HRC futures rose with fluctuations, with the most-traded contract closing at 3136, up 0.06% on a daily basis. In terms of supply, the impact from maintenance of hot-rolled coil production this week was 19,600 mt, a decrease of 32,800 mt WoW. Next week, the impact from maintenance of hot-rolled coil production is expected to be 2,800 mt, a decrease of 16,800 mt WoW. The impact from maintenance of hot-rolled coil production has reached its lowest point, further increasing the supply pressure of HRC. Demand side, the end-use demand from the manufacturing sector remains relatively resilient, but seasonal decline trends have also emerged. Cost side, there have been widespread rumors of production restrictions on sinter in Tangshan today. According to the SMM survey, production restrictions on sinter in Tangshan steel mills do exist. However, the steel mills themselves have sufficient sinter inventory, which is unlikely to lead to production cuts in blast furnaces. Meanwhile, there is still an expected increase in pig iron production from blast furnaces, and the short-term support for furnace charge may not collapse easily. Looking ahead, the fundamental contradictions of HRC are still in the accumulation stage, but inventory pressure is at a low level compared to the same period in previous years. Coupled with moderate cost support, it is expected that the most-traded HRC futures contract will continue to fluctuate at highs in the short term.

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