[SMM Steel] Vietnam HRC Import Price Falls to 510 USD/tonne CFR

[SMM HRC Daily Trading Volume] On July 31, the combined daily HRC trading volume of sample enterprises in SMM’s four cities (Shanghai, Lecong, Tianjin, Ningbo) totaled 10,630 mt, down 50 mt, or 0.4% DoD, 11.34% YoY, and 32.72% Lunar YoY.

HRC prices weakened from the previous week, and overall transactions declined WoW. Supply side, the impact from rolling line maintenance decreased WoW, lifting overall HRC production. Demand side, apparent demand dropped WoW. Inventory side, total HRC inventory rose by 77,500 mt WoW, while mill inventory fell by 6,200 mt WoW. Social inventory, SMM statistics of 86 warehouses nationwide (large sample) showed HRC social inventory at 4.4773 million mt, up 83,700 mt WoW (+1.90% WoW) and up 40.27 mt YoY on a calendar basis. By region, except the northeast that saw slight destocking, all other markets experienced inventory buildup, with east China showing relatively large fluctuations. Cost side, the second round of coke price cuts was implemented, weakening cost support. Looking ahead, SMM expects hot metal production to bottom out and rebound, and with the US-Iran conflict pushing up ocean freight rates, iron ore prices may see a slight rebound. Meanwhile, a third round of coke price cuts still lingers, leaving overall cost support moderate. From a fundamental perspective, the HRC supply-demand imbalance continues to build, and combined with the PBoC Politburo meeting expectations falling short, there is no clear upward price catalyst. However, given that prices are already at relatively low levels, downside room is limited. HRC prices are expected to move sideways at the bottom next week, with the most-traded HRC contract trading in the 3,200-3,390 range.