[SMM Rebar Daily Review] Weak Reality Situation Remains Hard to Ease, Businesses Remain Cautious in Operations

Today, futures moved sideways in a narrow range and closed at 3,078, up 0.16% from the previous trading day. In the spot market, prices in many regions were stable during the morning session with a wait-and-see stance, but in the afternoon, transaction performance was poor in a few markets, with bottom prices easing by 10-20 yuan/mt. Overall trading performance was moderate.
Supply side, some steel mills in North China plan to suspend wire rod production in the short term due to profitability issues. Additionally, recent environmental protection-driven production restrictions in Tangshan have led some producers to implement temporary furnace idling and production stoppages, though the impact on construction steel output has been limited. Other mills are mostly maintaining normal production. Demand side, the futures rally today boosted trading sentiment in east China, while downstream procurement in other regions remained cautious. Transactions at low prices were moderate, but high-priced resources struggled to find buyers, resulting in overall trading performance that remained moderate throughout the day. It is understood that there is currently a shortage of specifications in the Hainan and Guangdong markets. Specifically, the Hainan market has seen low arrivals, and traders are actively pushing up prices, with bottom prices rising rapidly. Looking ahead, during the traditional off-season, the market’s “weak reality” is unlikely to ease, and coupled with steel mills' per-ton losses not yet reaching the tipping point for voluntary production cuts, fundamental pressures will continue to weigh on spot price increases. Short-term price trends are expected to continue to move sideways.