SMM daily comment on domestic HRC market (Aug 28)

SHANGHAI, Aug 29 (SMM) –

HRC futures contract dropped after rising and closed at 3,858 yuan/mt, a decrease of 1.38%. In the spot market, the HRC prices in major cities fell 10-50 yuan/mt. As the steel production reduction policy has not yet been fully started, output is estimated to pick up this week. From the demand side, while the peak season of the downstream market is drawing near, overall performance was still weak, while the imbalance between HRC supply and demand was significant. From the cost side, supported by the high production of molten iron and driven by the upward ore market, steel prices may run strongly in the short term. Affected by the stock market, HRC futures opened high and moved low, finally returning to their fundamentals. Last weekend, Shandong, Shanxi, and other places were spreading the news of production reduction implementation. In the follow-up, attention should be paid to the progress of relevant policies and demand side in the transition to the peak season. Short-term HRC prices may still fluctuate in a wide range.