Hot rolled coil prices fluctuate, inventories increase but coil prices are expected to operate within a range

Today, hot rolled coil prices fluctuated downward, with the main contract closing at 3,218 at the end of the trading session, up 0.09% intraday. In the spot market, prices in major cities across the country mostly decreased by 10 yuan/ton, with transactions generally below average. Cold rolled prices remain stable. The weekly balance data for SMM hot rolled coil was released today, showing continued production increase and a significant drop in apparent demand. According to SMM’s data from 86 warehouses nationwide (large sample), total social inventory of hot rolled coil is 5.3775 million tons, up 1.1404 million tons compared to the pre-holiday period, and up 31.57% year-on-year based on the lunar calendar. Regionally, the largest increases are in South China, East China, and North China. Meanwhile, factory and warehouse stocks have accumulated 166,300 tons, with total inventory reaching 6.7206 million tons. Although still high compared to the same period last year, market sentiment indicates that the inventory buildup during this Spring Festival remains within expectations, so coil prices have not seen a significant decline. On the cost side, due to production restrictions, ore prices face strong resistance to rise, and the supply and demand in the coke market remain weakly balanced, with some weakening in support. Overall, recent price fluctuations are mainly driven by sentiment. Considering the upcoming important meetings and the macroeconomic news that still has potential to boost the market, coil prices are expected to fluctuate within a range, with limited room for both gains and losses. (Shanghai Nonferrous Metals Network)