SMM Daily HRC Market Comment and Forecast

SHANGHAI, May 5 (SMM) - HRC futures contract rose initially and then fell yesterday May 4, closing down 2% at 3,663 yuan/mt. HRC offers in major spot markets across the country fell sharply amid thin transactions. Some steel mills in east China undertook maintenance, while some lowered output due to thin profits, reducing the total HRC output by 12,400 mt on a weekly basis. Shipments in major regions were stable this week. Buying sentiment was cautious amid falling prices. The holiday break also affected transactions. As a result, HRC inventories added 3.29% on a weekly basis to 3.37 million mt. With supply falling slightly due to maintenance and demand barely picking up with onset of rainy season in east China, HRC prices may hover sideways or face downside risk. Factor to watch: overseas economic recession risks could dent market confidence.