[SMM Hot Rolled Daily Review] Increased Steel Mill Maintenance May Push Up Futures Prices?

The most-traded HRC futures contract fluctuated rangebound today, closing at 3,416, down 0.38% at the end of the session. Supply side, the impact from maintenance on HRC this week was 212,000 mt, up 64,500 mt WoW. The expected impact from maintenance next week is 258,000 mt, up 46,000 mt WoW, indicating a slight decrease in HRC supply. Demand side, high temperatures and heavy rainfall significantly affected the recovery of end-use demand, with no clear signs of fully exiting the off-season yet. Raw material, at month-end, there was an increase in maintenance due to environmental protection-driven production restrictions in the north, potentially leading to a downward trend in hot metal, weakening short-term cost support. Overall, expectations for reduced supply in finished products may increase. Continued attention should be paid to SMM maintenance data. If production restrictions in the north continue to rise, it could strengthen the "supply reduction" logic, potentially leading to a slight increase in finished product prices, but with limited upside. It is recommended to mainly adopt a strategy of selling on rallies.