HRC futures prices continued to move sideways today, closing down 0.03% at 3,334 for the most-traded contract. HRC spot prices weakened slightly nationwide, while cold-rolled coil spot prices remained stable with a weakening trend. Overall trading performance was moderate. On the news front, rumors circulated today that China is considering guiding banks to provide loans to help local governments resolve trillions in corporate arrears.

On HRC, supply side, steel mills in south and central China underwent maintenance this week, while some mills in north China completed maintenance and resumed production. Coupled with increased production schedules at some mills, HRC production rose MoM. Social inventory side, SMM's survey of 86 warehouses nationwide (large sample) showed HRC social inventory at 3.6407 million mt, down 29,400 mt (or 0.8%) WoW, and down 22.63% from the same period in previous years. National social inventory declined this week, with significant decreases in north and north-east China, while other markets continued to see inventory buildup. The overall inventory growth slowed substantially. Short-term, HRC inventory remains low for the same period in previous years, and total inventory is expected to begin declining over the next one to two weeks, with no significant supply-demand imbalance.

In the short term, cold-rolled and HRC prices lack clear drivers and are likely to continue moving sideways.