HRC futures held up well today, with the most-traded contract closing at 3,385, up 0.83%. Spot market prices rose 10-20 yuan MoM. In terms of news, there were rumors today that China will push for a reduction in steel production in 2025 and 2026; subsequently, a notice about the "Steel Industry Stable Growth Work Plan (2025-2026)" was released. SMM's weekly HRC balance data showed that, on the production side, some steel mills in south China continued to be affected by maintenance, leading to a slight MoM decrease in HRC production. On the inventory side, SMM's statistics for 86 warehouses (large sample) across the country showed a social inventory of 3.5659 million mt, up 142,200 mt or 4.15% MoM, and down 26.74% YoY. National social inventory continued to accumulate this week, with the increase expanding. By region, the increments were larger in east China, south China, and north China.

In the short term, the impact of production restrictions due to the parade will be concentrated. The market is trading ahead of the resumption of blast furnace production after the restrictions, coupled with a rapid rebound in hot metal during the peak season, which is expected to drive raw material prices higher. It is anticipated that HRC prices will fluctuate rangebound in the near term, making further downward movement difficult.