SHANGHAI, Aug 15 (SMM) –
HRC futures market rolled over yesterday, closing down 0.79% at 3,889 yuan/mt. In the spot market, mainstream offers for HRC declined yesterday. This week, crude steel output limit was not yet fully implemented, and steel mills were reluctant to reduce production. According to SMM research, HRC scheduled production of steel mills in August increased significantly, piling a greater pressure on the supply side. On the demand side, boosted by recently falling HRC prices, terminal demand increased, but may be unsustainable in case the fact that HRC price continues to rise. In addition, players in terminal market still aimed to keep inventory low. Under such circumstance, unbalanced supply-demand fundamentals of HRC appeared.
The social finance data released last Friday was acceptable, but rumors of default broke out in many real estate companies. Therefore, bearish real estate market may linger in a short term, blunting market confidence to a certain extent. If the real estate data to be released tomorrow improves, market sentiment is expected to stabilize. Participants expected "implementation of crude steel output limit". If the expectation materializes, it may be an important turnaround for HRC market, and the short-term cost support will remain. The downward space for the short-term HRC price will be limited. It is expected that HRC prices will fluctuate in a wide range next week under the sway of negative news.
