[SMM Analysis: Domestic Futures Market Weakened Again During the Day, Moderate Transactions for Low-Priced HRC in Ningbo] According to the SMM survey, this week, the large-scale HRC inventory in Ningbo tracked by SMM stood at 246,500 mt (as of December 25), down 47,500 mt WoW.
[SMM Analysis] Futures Market Weakened Again During the Day, Ningbo HRC Low-Price Transactions Moderate
According to the SMM survey, this week, SMM Ningbo HRC large-scale inventory stood at 2.465 million mt (as of December 25), down 47,500 mt WoW. This week, HRC futures fluctuated rangebound, with a significant drop of 0.96% on Friday. As of the afternoon close on December 27, the most-traded HRC 2505 futures contract settled at 3,400 yuan/mt.
This week, spot prices in major cities showed regional divergence, with WoW fluctuations ranging from 10-40 yuan/mt compared to last Friday. However, due to the futures market fluctuating downward today, most markets experienced moderate-to-low trading sentiment. End-users adopted a more cautious stance, HRC transactions were weak, and low-price transactions performed slightly better in some regions.
According to the SMM survey, in this week's Ningbo spot trading market, mainstream HRC resource transaction prices fluctuated rangebound. As of the afternoon of December 27, late-session spot quotes were at 3,440-3,460 yuan/mt, stable compared to last Friday's 3,450 yuan/mt.
This week, overall HRC transactions were at a moderate level. However, as year-end approaches, some traders showed a strong willingness to clear inventory, actively selling at low prices, resulting in moderate daily transactions. Ningbo HRC continued its destocking trend this week, with a larger decline, mainly due to the delayed arrival of mainstream steel mill supplies and traders' strong year-end destocking intentions. Currently, mainstream steel mills have completed annual maintenance, and subsequent supplies are expected to arrive gradually. Ningbo HRC inventory is expected to start building up in two to three weeks.
This week, SMM's weekly balance data showed that some steel mills completed maintenance, leading to a slight increase in HRC production WoW. Futures fluctuated rangebound this week. At year-end, end-users still released some procurement demand, coupled with traders actively selling, resulting in a continued decline in social inventory overall.
Looking ahead, steel mill maintenance plans are expected to decrease, and short-term HRC production may fluctuate rangebound. Currently, downstream demand faces seasonal pullback pressure, and the inventory turning point is approaching. HRC inventory is expected to face accumulation risks next week.
