SMM daily comment on domestic HRC market (Aug 29)

SHANGHAI, Aug 29 (SMM) –

HRC futures fluctuated and closed at 3,848 yuan/mt today, a decrease of 0.98%. In the spot market, HRC quotations in mainstream cities across the country dropped by 10-20 yuan/mt compared with yeasterday. According to SMM statistics, the amount of molten iron output reduction affected by blast furnace maintenance this week will be 863,000 mt, a decrease of 75,400 mt from the previous week. And the output cut of HRC will be 103,500 mt, a decrease of 50,900 mt from last week, and that of next week will be 0 mt, a decrease of 103,500 mt WoW. From the demand side, while the peak season of the downstream market is drawing near, overall performance was still weak. The willingness of the terminal to keep inventory at low level, and the imbalance in the fundamentals of HRC is more obvious. On the cost side, the weak supply and strong demand of iron ore remains unchanged in the short term, supporting HRC prices. Last weekend, many places issued production reduction implementation plans. 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.