[SMM Analysis] Market Cools Further as Chinese New Year Approaches, Ningbo HRC Inventory Accumulation Accelerates

[SMM Analysis] Market Further Cools Down Ahead of Chinese New Year, Ningbo HRC Inventory Buildup Accelerates According to the SMM survey, this week, SMM's large-scale HRC inventory in Ningbo stood at 230,000 mt (as of January 2), up 29,000 mt WoW. This week, HRC futures fluctuated rangebound, with a weekly decline of 0.77%. As of the afternoon close on January 23, the most-traded HRC 2505 futures contract settled at 3,457 yuan/mt. This week, spot prices in major cities mostly remained stable. Most mainstream traders have entered the holiday period, further cooling market activity, with spot transactions in most cities weakening significantly WoW. According to the SMM survey, in Ningbo's spot trading market this week, transaction prices of mainstream HRC resources remained stable. As of the afternoon of January 23, late-session spot quotes were at 3,490-3,500 yuan/mt, up 20 yuan/mt from last Wednesday's 3,470 yuan/mt. This week, HRC transactions were sparse, as most traders have started their holidays, selling sporadically with stable quotes. Ningbo's HRC inventory buildup significantly accelerated this week, increasing by 29,000 mt. With the Chinese New Year holiday approaching, inventory is expected to continue accumulating. Meanwhile, mainstream steel mills have announced adjustments to their product pricing policies, with February ex-factory prices reduced by 200 yuan/mt from January levels, and Q235B executed at 3,800 yuan/mt. This week, SMM's weekly balance data revealed that steel mills were actively producing, with HRC production continuing to increase. Futures performance remained weak this week, coupled with partial holiday closures of traders and end-users in some regions, resulting in only limited demand release. Overall, social inventory has entered pre-holiday accumulation. Looking ahead, steel mills are expected to maintain high production enthusiasm, exerting considerable supply pressure on HRC. With the traditional Chinese New Year approaching, the market currently shows a situation of prices without transactions. Nationwide social inventory is expected to continue accumulating. Overall, pre-holiday end-use demand has been moderate, and inventory accumulation is better than seasonal expectations.

SMM

[SMM Analysis] Market Cools Further as Chinese New Year Approaches, Ningbo HRC Inventory Accumulation Accelerates

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