Today, HRC futures and spot prices held up well, with prices rallying in the afternoon. The most-traded contract closed at 3292, up 1.23%. In the spot market, domestic market quotes rose MoM, but overall transaction performance was weak. In overseas markets, export prices increased by $2-3/mt. Today, SMM released its weekly HRC balance data, showing a narrow decline in HRC production this week. Looking ahead, some steel mills in the north may arrange maintenance in the mid-to-late period, and it is expected that there will still be room for a pullback in HRC production nationwide over the next two weeks. This week, SMM's statistics showed that the social inventory of HRC in 86 warehouses nationwide (large sample) was 3.0346 million mt, down 38,200 mt MoM, or 1.24% MoM, and down 31.96% YoY. Social inventory nationwide continued to decline. By region, except for minor inventory buildup in the north-east and north China, inventories in east, south, and central China were all de-stocking.
In the short term, the fundamental contradictions in the HRC market are accumulating slowly. Coupled with the recent strengthening trend in cost, HRC prices are under upward pressure but also have strong support below. It is expected that the most-traded HRC contract will fluctuate rangebound in the short term, with an upper pressure level at 3330.