SMM daily comment on domestic HRC market (Aug 17)

SHANGHAI, Aug 18 (SMM) –

HRC futures prices closed down 0.13% at 3,924 yuan/mt. In the spot market, mainstream offers showed mixed trend yesterday. HRC output kept hiking this week without newly added maintenance of steel mills, but may inch lower next week, owing to maintenance of some steel mills in southwest China On the demand side, with a turnaround in deals changing hands at low prices, social inventory decreased slightly from last week.

In terms of regions, except for the East China and Central China markets, South China, North China and other markets saw inventory reduction. High pig iron output boosted demand iron ores, which will still offer short-term support for HRC market. Recent depreciation of the renminbi pushed up iron ore, which also strengthened the cost support for the finished product, thereby boosting HRC futures. At present, Players still put focus 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.