Hot rolled coil futures weaken, social inventory depletes but coil prices may continue to decline

Today, hot-rolled coil futures fluctuated and weakened, with an overall decline of 0.45%, and the main contract closed at 3305. In the spot market, mainstream prices remained stable, with most transactions being average. Cold-rolled prices stabilized, and transaction performance was average. During the day, news broke that BHP still disagrees with ZK’s core demand to use RMB for settlement and is preparing to reduce production and lower shipping targets. Today’s SMM hot-rolled weekly balance data has been released, showing a narrow fluctuation in output. The national social inventory of hot-rolled coil in 86 warehouses (large sample) is 5.5229 million tons, a decrease of 36,200 tons month-on-month, or a decline of 0.65%, and an increase of 21.22% year-on-year. The national social inventory overall maintains a destocking trend, but regionally, apart from South China and North China markets continuing to destock, other markets have seen an increase in inventory. At the same time, the pace of traders’ procurement is still acceptable, with factory inventory shifting from an increase to a decrease. The overall inventory stands at 6.7821 million tons, a week-on-week decrease of 89,100 tons. Looking ahead, the cost logic is weakened due to the decline in oil prices and reduced disturbances in iron ore supply, and it is expected that coil prices will follow a weak fluctuating trend. (SMM)