The fundamentals of the plate material have no short-term narrative space. It is expected to follow a slightly stronger oscillation on the cost side next week.

This week, hot rolled coil prices saw volatile yet strengthening movement. On Friday, the main contract closed at 3295, up 0.52% for the day. In the spot market, weekly prices were raised by 30-70 yuan per ton, and trading volume improved month-over-month.

This week’s news coverage mostly centered on developments at the raw material end. Reports said that in China, multiple companies were rushing to shift BHP ore due to concerns about new restrictions. The market’s worries about a short-term iron ore shortage pushed coil prices sharply higher.

Returning to hot rolled coil fundamentals: due to production limits and maintenance, this week’s hot rolled coil output continued to decline. For social inventory, according to SMM statistics, the national hot rolled coil social inventory at 86 warehouses (large sample) totaled 559.53 million tons this week, down by 1.68 hundred thousand tons month over month, or down 0.3% month over month; the lunar year-on-year figure was up 25.02%. The overall inventory growth rate has clearly slowed. In terms of apparent demand, it improved slightly compared with last week on a month-over-month basis, but it still remains below the same period last year.

Looking ahead, there is unlikely to be much narrative space for basic fundamentals of plate products. Cost-side support will have more say. Before there is any clear expansion in both domestic and overseas demand for hot rolled coil, in the short term prices are expected to continue to run on the stronger side following cost trends. The main contract is expected to trade in a range of around 3250-3330. (SMM)