SMM daily comment on domestic HRC market (Aug 15)

SHANGHAI, Aug 16 (SMM) –

HRC futures prices made gains yesterday, and closed up 0.62% at 3,924 yuan/mt. In the spot market, mainstream offers for HRC hiked by 10-30 yuan/mt yesterday. Pig iron production reduction was 948,200 mt this week, triggered by maintenance of blast furnace (BF), down 95,200 mt WoW. In terms of HRC, the maintenance-induced HRC production reduction was 82,500 mt this week, up 2,000 mt WoW, and will be 136,500 mt next week, up 54,000 mt WoW. On the demand side, HRC price slip boosted demand from terminal sectors, but end-users still kept their inventory low. Under such circumstance, unbalanced supply-demand fundamentals unfolded. Real estate data released yesterday added bearishness to HRC market, meeting certain expectations. The Central Bank's interest rate cut in morning trading session may make for reduction of LPR interest rate, boosting market sentiment to a certain extent. Currently, HRC market saw waning impact of positive news. In addition, there will be no macro data to be released in a short run. It is expected that HRC market will fluctuate in a wide range in the near future. At the same time, specific implementation of production restrictions will need to be watched.