SMM daily comment on domestic HRC market (Sep 4)

SHANGHAI, Sep 4 (SMM) – HRC futures moved upwards today, closing up 0.2% at 3,917 yuan/mt. The quotations of HRC spots in domestic major cities rose before falling. Optimistic expectations in traditional peak season and recent positive macro news have boosted market sentiment. Downstream demand is expected to pick up steadily. On the supply side, the impact of crude steel production cap policy is smaller than expected, and steel mills are keeping pig iron output at high levels. High output of molten iron may support a continued rise in iron ore prices. In view of domestic coal mine accidents and falling overseas shipments, coke market is estimated to remain stable in the short term, offering solid cost support to HRC. Therefore, stimulated by strong cost support and demand expectations brought by the traditional peak season, short-term HRC prices are expected to fluctuate upward. Entering September and October, market buyers need to keep a wary eye on the risk demand recovery being slower than expected.