[SMM Sheets & Plates Daily Review] Inventory Buildup Under Pressure, Cost Support in the Doldrums

The most-traded HRC contract closed at 3,312 today, down 0.45% for the day. Spot side, hot-rolled prices were stable to down 10-20 yuan/mt, cold-rolled prices held steady, and overall trading was weak. Today's weekly HRC balance data showed: Supply side, the impact from maintenance increased this week, and production edged lower. Demand side, affected by the Dragon Boat Festival holiday and deepening off-season, demand fell noticeably this week. Inventory side, SMM data showed HRC social inventory across 86 warehouses nationwide at 4.2912 million mt this week, up 64,500 mt, or 1.53% WoW, and up 39.78% YoY based on the lunar calendar. By region, the inventory buildup was larger in northeast China, central China, and north China than in east China, while south China saw slight destocking. Looking ahead, the supply-demand imbalance for sheets & plates is starting to accumulate, but the market expects more rounds of price increases after the 9th coke increase is implemented. Cost support from sheets & plates makes it hard for prices to fall sharply. In the near term, prices are expected to remain in the doldrums, with a floor support at 3,280.