SMM Daily Comment On Chinese Rebar Market (Apr 27, 2023)

SHANGHAI, Apr 28 (SMM) - Rebar futures prices went down after opening higher yesterday April 27, closing down 0.3% at 3,691 yuan/mt. Both blast furnace and electric furnace-based steel mills have cut output. Some electric furnace-based steel mills in east and south China plan to shut down soon, which will reduce rebar supply. Spot rebar prices rose slightly. End users stocked up before the upcoming holiday. Speculative demand was weak. Coke prices have undergone five rounds of cuts, with the sixth round of cuts potentially on the way. If steel mills extend output cuts, rebar inventories will keep falling, which will support rebar prices. In the medium term, demand will hardly improve. Only when output cuts by steel mills are deep enough and raw material prices bottom out, can supply and demand rebalance.