[SMM Daily Review of Hot-rolled Steel] Spot cargo transactions improved this week. Be cautious of the jump initially and then pull back in coil prices next week.

Today, HRC futures fluctuated rangebound, with the most-traded contract closing at 3201, up 0.25% on a daily basis. In the spot market, spot prices were in the doldrums, and the market trading atmosphere weakened. Overall daily trading volume pulled back compared to yesterday, with end-user purchase willingness remaining low. On the news front, US President Trump stated plans to impose tariffs ranging from 60% to 70% and from 10% to 20% on different countries, with countries starting to pay these tariffs from August 1. From the HRC fundamentals perspective, the impact from maintenance on HRC continued to decline this week, with production increasing slightly by 2,900 mt MoM. Weekly production reached 3.3685 million mt, and the supply pressure of HRC gradually became prominent. On the demand side, order-taking for automobiles and home appliances slowed down, and the operating rate level declined. Considering the recent weak order-taking and trading in cold-rolled steel, the demand for structural steel weakened, and the impact of the off-season became further prominent. This week's significant rally in the futures market somewhat boosted the willingness to trade in the market, but it was mostly driven by the release of speculative demand, with no significant improvement in actual demand. Downstream industries still focused on purchasing as needed. On the cost side, iron ore provided strong support, while coke was in the doldrums, and the short-term support from furnace charge was moderate. In summary, HRC inventory continued to accumulate this week, with the accumulation range gradually expanding. The pattern of strong supply and weak demand has not changed for the time being. Looking ahead, there may be additional maintenance at steel mills in North China, and supply pressure is expected to undergo a slight correction. Currently, the market has strong expectations for the July Central Political Bureau meeting, and it is necessary to be vigilant about the risk of futures market pullback after sentiment digestion. It is expected that the fluctuation range of the most-traded HRC futures contract next week will be between 3150-3270.