SMM Daily Comment On Domestic HRC Market (Sep 15)

SHANGHAI, Sep 15 (SMM) – HRC futures fluctuated upward and closed at 3,892, an increase of 0.96%. In terms of spot prices, HRC quotations in mainstream areas remained volatile and high this week. This week, HRC production fell slightly and supply pressure eased. Spot market volume was flat compared with last week. The inventory reduction led to a slight increase in HRC prices, and the imbalance between supply and demand weakened. As the impact of maintenance on production capacity diminishes, production may rebound slightly next week, oversupply pressure will intensify. In the follow-up, POBC’s RRR cut boosted market confidence, coupled with favorable policies, demand markets will see a dramatic improvement in the medium term. Overall, raw material offered solid support. Towards the end of September, terminal demand may pick up driven by downstream replenishment and peak season expectations. It is expected that HRC prices will fluctuate strongly next week, and the HC2401 contract is estimated to remain volatile at 3800-4100 yuan/mt, varying range between -50 to +100.