[SMM Xi'an Building Materials Inventory] Inventory in Xi'an continues to decline amid outbound resource shipments and production controls at steel mills

Today's iron ore market showed a flat trend, with the main contract I2701 on the DCE closing at 681.5 yuan per ton, unchanged from the previous trading day. The spot prices at Qingdao Port remain largely stable, with traders showing good activity and steel mills making purchases based on demand.

The most-traded HRC contract consolidated on a strong note today, closing at 3,242, up 0.15% intraday. Spot prices consolidated on a strong note, with some markets maintaining the morning gain of 10 yuan/mt. From a fundamental perspective, supply side, this week's impact from hot rolling maintenance was 114,900 mt, down 48,800 mt WoW, and is expected to further decline to 46,400 mt next week, down 68,500 mt WoW, indicating a clear rebound trend in production. Demand side, the rise in futures drove a WoW improvement in spot trading sentiment, but actual transactions were still dominated by low-price deals, with end-users purchasing as needed. Cost side, the daily average hot metal output at steel mills this week was 2.3584 million mt, up 6,400 mt WoW, showing marginal improvement, but the absolute level remains low, limiting the cost side's push on finished steel. On the news front, the National Development and Reform Commission (NDRC) proposed expanding domestic demand with greater intensity and more concrete measures, warming policy expectations and supporting the recovery of low valuations. However, the transmission chain from policy to actual sheets & plates orders is long, making it difficult to materialize in the near term. In summary, HRC shows a pattern of rising supply and stable demand. This week's destocking performance in mainstream cities was mediocre, with near-term contradictions concentrated on the raw material side. Whether the rumored supply growth in coking coal can be confirmed is a key variable. Considering that sheets & plates valuations are already at low levels, the downside is also limited. Prices are expected to maintain a fluctuating trend, with subsequent attention on the implementation of raw material news and the verification of destocking pace.