SMM HRC Daily: Prices Expected to Surge Briefly Before Volatility Ahead of Chinese New Year

[SMM HRC Daily Review: With Chinese New Year Approaching, HRC Prices Are Expected to Briefly Surge Before Entering a Volatile Trend Next Week]

Today, the HRC futures market continued to rise, closing at 3,484 in the afternoon, up 1.52%. This week, HRC spot prices saw a significant increase. Fundamentally, the number of steel mill HRC production line maintenance cases decreased this week, leading to an increase in weekly HRC production. Meanwhile, market demand also improved, with downstream end-users showing higher purchasing enthusiasm, easing the fundamental imbalance in the HRC market.

Looking ahead, news of RRR cuts and interest rate cuts by the PBOC has emerged, coupled with a significantly slower inventory buildup of HRC compared to previous years. The fundamental imbalance in the HRC market remains relatively low, which is favorable for HRC prices. On the cost side, coke prices are expected to decline in the short term, while ore prices remain volatile, slightly weakening cost support for HRC.

In summary, the fundamental imbalance in the HRC market is relatively small, and with Chinese New Year approaching, market confidence is strong. HRC prices are expected to briefly surge before entering a volatile trend next week, with the most-traded contract expected to fluctuate within the range of 3,410-3,560.