SMM Daily Price Review and Forecast on HRC Market

SHANGHAI, August 4, (SMM)-

HRC futures stayed rangebound yesterday, closing down 1.78% at 3,984 yuan/mt. In the spot market, mainstream offers for HRC yesterday dipped by 40-60 yuan/mt. This week saw HRC output hike, feeling impact from operation resumption of some steel mills in the North, East China and Southwest China. Given currently acceptable profits and as-yet-unreleased documents linked to output restrictions. HRC output may hike in early August. On the demand side, weakness in profits and demand and the typhoon led to muted transactions. The overall social inventory increased significantly. In addition, the fourth round of coke price hikes reported will still give a boost to HRC prices in a short run. Last night, Fitch Ratings lowered the credit rating of the United States, which led to a weakening of market sentiment. Besides, there was another news about crude steel production limitations during the trading session. Under this circumstance, a highly volatility of HRC futures market was monitored.

With waning impact of positive macro news and the news, HRC market may swing on a bearish territory in a short term. In the follow-up, positive macro news and favorable policies will be to be watched.