[SMM HRC Daily Review] HRC inventory continues to accumulate, with few transactions during the day

Published: Jul 31, 2025 17:30

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Today, HRC prices weakened significantly, with a full-day decline of 3.56%, and the most-traded contract eventually closed at 3390. Mainstream spot market prices followed suit, dropping by 40-90 yuan/mt. Market confidence weakened notably, and the trading atmosphere throughout the day was moderately to poorly active. On the news front, both sides will continue to promote the 90-day extension of the suspended 24% reciprocal tariff imposed by the US and China's retaliatory measures as scheduled. In terms of supply, apart from some recently added production lines undergoing annual inspections as needed, most steel mills enjoyed good profits and maintained high production enthusiasm. Supply increased slightly MoM, and overall production fluctuated at a medium-to-high level. Demand side, the futures market rally in the first half of the week significantly boosted market trading sentiment, and apparent demand rebounded somewhat. However, as futures prices corrected in the second half of the week, traders' selling sentiment declined, and most downstream buyers adopted a cautious procurement approach. Meanwhile, according to the SMM balance data released during the day, social inventory nationwide continued to accumulate this week, with the overall trend aligning with previous expectations. The release of speculative demand was observed in most regions, while no significant improvement was seen in actual downstream orders.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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