SMM Daily Comment On Domestic Rebar Market (Sep 26)

SHANGHAI, Sep 27 (SMM) – Rebar futures fell sharply again and closed at 3,675 yuan/mt yesterday, down 1.76% from the previous day. Spot market prices fell by 10-30 yuan/mt. Steel prices fell more than scrap steel, which squeezed the profits of electric furnace steel mills and further reduced their production enthusiasm. Output reduction caused by blast furnace steel mills’ maintenance saw a minor drop, stabilizing the rebar supply. Steel prices hitting bottom stimulated some speculative purchases, but terminal market’s transactions were still dominated by rigid demands. In the follow-up, cost support will be robust once the coke price hike is implemented. The pre-holiday replenishment volume fell short of expectations, which is insufficient to drive demand. In the short term, rebar prices are to fluctuate at a lean level.