[SMM Analysis: Futures Fluctuated Downward, HRC Transactions in Ningbo Deteriorated] According to the SMM survey, this week, SMM's large-scale HRC inventory in Ningbo stood at 393,000 mt (as of February 14), up 27,300 mt WoW.
[SMM Analysis]Futures Fluctuate Downward, Ningbo HRC Transactions DeteriorateAccording to the SMM survey, this week, SMM Ningbo HRC large-scale inventory stood at 393,000 mt (as of February 14), up 27,300 mt WoW. This week, HRC futures prices fluctuated downward, and as of the afternoon close on February 14, the most-traded HRC 2505 futures contract settled at 3,377 yuan/mt. In the second week after the holiday, prices in most mainstream cities fell by 40-80 yuan/mt WoW. While market trading sentiment improved earlier in the week, overall spot transactions began to deteriorate in the latter half as futures prices pulled back. According to the SMM survey, in the Ningbo spot trading market this week, transaction prices of mainstream HRC resources fluctuated downward. As of the afternoon of February 14, late-session spot quotes were at 3,410-3,420 yuan/mt, down 50-60 yuan/mt from last Friday's 3,470 yuan/mt. This week, spot market trading sentiment improved moderately, and most end-users resumed operations after the Lantern Festival. Transactions were moderate earlier in the week, but as prices declined in the latter half, spot trading sentiment worsened, and market participants adopted a wait-and-see attitude. Some traders stood firm on quotes and were reluctant to sell. Meanwhile, inventory continued to accumulate this week, though the growth rate narrowed significantly, with an increase of approximately 27,300 mt WoW. Mainstream steel mills maintained normal deliveries. Looking ahead, if demand fails to match the supply intensity, Ningbo HRC inventory is expected to continue accumulating next week. This week, SMM released its weekly balance data. Currently, steel mills maintain high production enthusiasm, with HRC production continuing to increase. Post-holiday market transactions have somewhat rebounded, but supply growth still outpaces demand growth, leading to continued accumulation in social inventory. Total HRC inventory now stands at 5.8334 million mt, up 396,700 mt WoW. Looking ahead, according to the SMM survey, steel mills are expected to maintain strong production enthusiasm for HRC in February, with daily average production increasing. Supply pressure remains significant, and the full resumption of end-user operations may take time. Whether demand can sustain its release remains to be seen. Therefore, HRC inventory is expected to continue accumulating next week, though the growth rate may narrow.
