






[SMM Analysis] Sentiment Drives Sharp Rise in HRC Prices, but Ningbo HRC Spot Transactions Lag Behind, Leading to Slight Inventory Buildup
According to the SMM survey, the large-caliber inventory of SMM Ningbo HRC this week was 263,200 mt (as of July 23), up 17,800 mt WoW.
This week, HRC prices surged significantly, with spot prices rising by 150-200 yuan/mt on a weekly basis. The futures market continued its upward trend from last week, with a lively trading atmosphere dominated by speculative demand. Most downstream end-users still purchased as needed, with no significant increase in trading volume. As of the afternoon close on July 25, the most-traded HRC 2510 futures contract closed at 3,507 yuan/mt.
Meanwhile, according to the SMM survey, in the Ningbo spot trading market this week, in terms of prices, the transaction prices of mainstream HRC resources continued to rise. As of the afternoon of July 25, the spot quotes at the end of the day were 3,530-3,540 yuan/mt, up 170 yuan/mt from 3,360 yuan/mt last Friday. In terms of transactions, despite the continued sharp rise in the futures market, most traders' transactions were mainly focused on the transfer of cargo ownership, with no significant improvement in actual uncoiling demand. Moreover, most traders did not have a large inventory of mainstream goods in hand and still had expectations for the market, so they mainly refused to budge on prices and held back on sales. In terms of inventory, Ningbo HRC inventory accumulated slightly this week. As mentioned earlier, the DDH cargo had been stored this week, so the increase in external cargo and the insufficient sustained demand release during the week led to inventory accumulation. However, considering that the overall inventory is still at a relatively low level compared to the same period last year and that Ningbo HRC prices are already at a relatively high level compared to other mainstream cities under the strong performance of futures, it is expected that the contradiction in the local supply-demand pattern in Ningbo will not be prominent in the short term, and Ningbo inventory will fluctuate rangebound next week.
This week, SMM released the weekly balance data for HRC. HRC production increased slightly, with steel mills enjoying relatively good profits and having high production enthusiasm. According to the current SMM statistics, the social inventory of HRC in 86 warehouses (large sample) nationwide was 3.1369 million mt, up 102,300 mt or 3.37% MoM, and down 31.68% YoY. This week, the nationwide social inventory began to accumulate. By region, except for slight destocking in north-east China and central China, inventory buildup occurred in east China, south China, and north China.
Copyright and Intellectual Property Statement:
This report is independently created or compiled by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), and SMM legally enjoys complete copyright and related intellectual property rights.
The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders.
The above rights are strictly protected by relevant laws and regulations of the People's Republic of China, such as the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as applicable international treaties.
Without prior written authorization from SMM, no institution or individual may:
1. Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating);
2. Disclose the content of this report to any third party;
3. License or authorize any third party to use the content of this report;
4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses.
Data Source Statement:
(Except for publicly available information, other data in this report are derived from publicly available information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, brokerage reports, data from the National Bureau of Statistics, customs import and export data, various data published by major associations and institutions, etc.), market exchanges, and comprehensive analysis and reasonable inferences made by the research team based on SMM's internal database models. This information is for reference only and does not constitute decision-making advice.
SMM reserves the final interpretation right of the terms in this statement and the right to adjust and modify the content of the statement according to actual circumstances.
For queries, please contact Lemon Zhao at lemonzhao@smm.cn
For more information on how to access our research reports, please email service.en@smm.cn