[SMM HRC Daily Review] Market sentiment continues to ferment, with HRC prices holding up well in the short term

Published: Jul 22, 2025 17:16

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Today, HRC futures surged strongly in the afternoon session, with the most-traded contract closing at 3,477, up 2.83%. In the spot market, domestic quotes continued to rise by 40-70 yuan/mt MoM. In terms of supply, the impact from maintenance on hot rolling this week was 112,700 mt, an increase of 53,200 mt WoW. Next week, the impact from maintenance on hot rolling is expected to be 115,500 mt, an increase of 2,800 mt WoW, indicating a decrease in supply pressure. Demand side, with the current price increase, speculative and arbitrage demand is robust, while terminal purchases are mainly on an as-needed basis, creating a favorable overall trading atmosphere. Cost side, the sustained high level of hot metal provides support for ore prices, and the second round of coke price increases has been implemented, resulting in overall strong cost support. Looking ahead, the current futures market trading is still dominated by sentiment. Today, the market has heard news of capacity inspections for coal mines, enhancing expectations of a reduction in coking coal supply, which is bullish for coking coal and coke and drives a concurrent rise in the ferrous metals series. SMM expects that before the macro narrative is disproven, the most-traded HRC futures contract will continue to hold up well in the short term, driven by sentiment.

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