[SMM Rebar Daily Review] Demand Recovery Drives Inventory Reduction, Short-Term Prices May Consolidate

Futures consolidated with an upward bias today, closing at 3,071, down 0.16% from the previous trading day. In the spot market, quotes in some markets edged lower in early trading. In the afternoon, futures held up well, and spot prices in a few markets saw a slight correction. Prices fell by 10-20 yuan/mt over the full day, with overall trading activity described as average.
On the supply side, most blast furnace steel mills are maintaining their current unsaturated production pace, with only a few producers resuming rolling line production as planned. After two rounds of coke price cuts were implemented, the cost-effectiveness of hot metal improved, easing pressure on scrap procurement for electric furnaces. Additionally, with per-tonne steel margins largely above the break-even line recently, some electric furnace mills have extended operating hours or resumed production. On the demand side, the National Day holiday last period disrupted end-user construction and logistics transportation, causing a sharp decline in building materials demand. After the holiday, demand gradually returned to normal levels, and with improved trading sentiment, apparent demand rose significantly WoW. According to SMM statistics, building materials inventories at mills and in social warehouses were destocked this period. Total building materials inventory stood at 6.7893 million mt, down 255,700 mt WoW, or -3.63% WoW, with inventory changes shifting from an increase to a decrease. Overall, the market is currently in a macro vacuum period, while building materials fundamentals show a weak balance with no clear directional driver. Building materials prices are expected to continue consolidating in the short term.