[SMM Rebar Daily Review] Building materials fundamentals continue to improve but with limited drivers, short-term steel prices may maintain a fluctuating trend

Futures consolidated today, closing at 3,118, up 0.03% from the previous trading day. In the spot market, most quotes were stable in early trading, while some markets saw declines of 10 yuan/mt, with downstream purchases remaining sluggish.
Supply side, blast furnace steel mills are still grappling with losses, with the cost side under persistent pressure, and most mills maintaining unsaturated production. On the EAF side, mills still have thin margins thanks to lower-cost steel scrap stocked earlier, and some enterprises have extended operating hours, driving a slight increase in supply. Demand side, pre-holiday restocking demand was largely released in the previous days, and today's market activity turned sluggish, with lackluster transactions. Inventory side, according to SMM statistics, total construction steel inventory stood at 7.1381 million mt, down 508,600 mt WoW, or -6.65% WoW, with destocking accelerating. Overall, construction steel fundamentals continue to improve, but the driving force is not enough to push steel prices higher. In the short term, prices are likely to consolidate, with attention needed on subsequent demand releases. If demand continues to increase, construction steel prices may have room to rise.