[SMM HRC Daily Review] Macro Expectations Fall Short as Sentiment Pulls Back, HRC Prices Expected to Remain in the Doldrums Next Week

Published: Aug 1, 2025 17:42

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This week, mainstream spot market prices fell by 50-110 yuan/mt WoW from last Friday. Market trading confidence weakened significantly following futures market movements in the latter half of the week, with overall trading sentiment moderately poor. Frequent market news emerged during the week. Domestically, after the Politburo meeting, no additional policies beyond expectations were announced, leading to a sharp pullback in market sentiment. On Thursday evening, issues such as coke producers exceeding production limits also triggered market reactions. Reviewing this week's HRC supply and demand performance, it remained relatively stable. Fundamental contradictions accumulated but were not acute, with overall inventory aligning with the seasonal buildup cycle but still at historically low levels. Looking ahead, market rumors of production restrictions persist, with iron ore demand expected to weaken, putting pressure on ore prices. However, steel mills' overall profit levels remain relatively healthy in the short term, and coke prices are anticipated to increase, providing resilient cost support that is unlikely to collapse soon. Moving forward, as August begins, the macro environment appears neutral, with HRC's price center reverting to fundamentals. After sentiment pulled back, end-users resumed a wait-and-see stance. HRC prices are expected to remain in the doldrums next week, with the most-traded contract fluctuating between 3,320 and 3,470.

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