SMM Daily Comment On Domestic HRC Market (Sep 14)

SHANGHAI, Sep 14(SMM) – HRC futures moved sideways and closed at 3,868 yuan/mt, up 0.13% from the previous trading day. In terms of spot prices, HRC quotations in China’s mainstream areas decreased slightly. This week, the production reduction caused by steel plant maintenance expanded, causing HRC output to drop WoW. Looking forward, according to the latest SMM survey, HRC profits were acceptable and output will rebound next week after some steel plants complete maintenance. On the demand side, there was no significant change in short-term downstream order volume and terminal procurement is difficult to witness substantial improvements. Meanwhile, market demand is recovering slowly and the downstream purchased on rigid demands. Macro data released in August picked up trading sentiment. Uncertain peak-season demand improvement effect and firm cost support will limit price drop. However, since the imbalance between supply and demand is still intensifying, short-term HRC prices may mainly fluctuate.