[SMM Sheets & Plates Daily Review] Supply-demand imbalance widens, hot-rolled coil prices still have downside room next week.

HRC prices continued to decline this week, resulting in sluggish transactions. In terms of supply, rolling line maintenance increased this week, leading to a slight decrease in overall HRC production. Demand side, apparent demand for HRC deteriorated significantly this week, as plum rain and high temperatures suppressed cargo pick-up. Downstream manufacturing entered the off-season, with cautious procurement. Coupled with falling steel prices, this exacerbated the market's wait-and-see sentiment. In terms of inventory, SMM's nationwide social inventory of HRC across 86 warehouses (large sample) stood at 4.2912 million mt this week, up 64,500 mt WoW, up 1.53% WoW. By region, the inventory buildup in Northeast, Central, and North China was greater than in East China, while South China saw slight destocking. Cost side, the average ore price edged lower, while the eighth round of coke price increases took effect, providing slightly stronger cost support for HRC. Looking ahead, costs may continue to rise, but the weak reality of finished steel products is gradually emerging. The supply-demand imbalance is widening, leaving room for further HRC price declines. Overall, the most-traded HRC futures contract is expected to trade in the 3,260-3,360 range next week.