This week, HRC spot prices showed a downward trend. Fundamentals: The number of steel mill hot-rolling maintenance lines increased, reducing weekly HRC production by approximately 55,000 mt. While supply pressure eased, market demand declined at a faster pace. Manufacturing purchasing strategies remained cautious, with most end-users lacking restocking plans and continuing to purchase as needed, exacerbating fundamental imbalances. Looking ahead, the US Fed's 25-basis-point rate hike was within expectations, and the market continues to focus on fundamentals. However, downstream end-user order-taking remained moderate, and expectations for the post-Chinese New Year market were weak, with low winter stockpiling willingness. Fundamental imbalances in HRC may continue to accumulate, further weighing on HRC prices. Cost side, coke prices and ore prices are both expected to decline next week, weakening cost support for HRC. Overall, the market lacks positive news, and HRC fundamental imbalances are gradually accumulating. The most-traded HRC contract is expected to fluctuate downward within the 3,330-3,450 range next week. 
[SMM HRC Daily Review] Unstable Cost Support; HRC Prices May Fluctuate Downward Next Week
- Dec 20, 2024, at 5:13 pm
【Unstable Cost Support, HRC Prices May Fluctuate Downward Next Week】This week, HRC spot prices showed a downward trend. Fundamentals: The number of steel mill hot-rolling maintenance production lines increased, reducing weekly HRC production by approximately 55,000 mt. While supply pressure eased, market demand declined at a faster pace. Manufacturing purchasing strategies remained cautious, with most end-users lacking restocking plans and continuing to purchase as needed, exacerbating fundamental imbalances. Looking ahead, the US Fed's 25-basis-point rate hike was in line with expectations, and the market continues to focus on fundamentals. However, downstream end-user order-taking remained moderate, and expectations for the post-Chinese New Year market were weak, with low winter stockpiling willingness. Fundamental imbalances in the HRC market may continue to accumulate, further weighing on HRC prices. On the cost side, coke prices and ore prices are expected to decline next week, leading to unstable cost support for HRC. Overall, with limited positive news and accumulating fundamental imbalances in the HRC market, the most-traded HRC contract is expected to fluctuate downward within the 3,330-3,450 range next week.
