SMM daily comment on domestic HRC market (Aug 16)

SHANGHAI, Aug 17 (SMM) –

HRC futures market moved sideways yesterday, and closed up 0.64% at 3,926 yuan/mt. In the spot market, mainstream offers for HRC hiked by 10-20 yuan/mt yesterday. The average operating rate of BFs was up 0.14 percentage point at 92.71% as of August 16, SMM Statistics showed. The daily average pig iron production of sample steel mills was 2.2375 million mt, an increase by 81,000 mt. On the demand side, a rally in HRC prices weakened terminal demand. And players in terminal sectors kept their inventory low. Under such circumstance, unbalanced supply-demand fundamentals were reported. Iron ore and coke markets will firm up, and the cost support will remain. At present, a focus was still putted on implementation of policy on crude steel production restrictions. Although there were rumors of the policy in many places, according to SMM research, few actual notices were received. Therefore, players need to pay attention to the specific implementation time of the policy. It is expected that HRC prices will fluctuate within a narrow range in the near future, and stand at 3,850 yuan/mt.