SMM daily comment on domestic HRC market (Aug 23)

SHANGHAI, Aug 24 (SMM) –

HRC futures prices moved upwards yesterday, closing up 1.18% at 3,937 yuan/mt. In terms of spot market, major offers for HRC mostly hiked by 10-60 yuan/mt. The average operating rate of BFs remained unaltered at 92.71% as of August 23, SMM Statistics showed. The daily average pig iron production of sample steel mills was 2.2391 million mt, an increase by 1,600 mt. On the demand side, robust terminal demand for low-priced HRC was reported, but the demand diminished when HRC prices hiked. On the cost side, good profits of steel mills and high pig iron output led to bullish iron ore market. However, coke prices increased amid fallout of coal mine accidents, and a round of coke price decrease is unlikely to dip in a short term. Under such circumstance, cost support may remain in a short run. Rising costs will boost prices of finished goods on the near term. It is expected that the short-term HRC market may swing in a narrow range. A possible fall in HRC prices and weak-than-expected demand for spots may appear after falling costs, which will deserve to be monitored.