SMM daily review and forecast for rebar market

Rebar futures market firmed up today, closing up 1.37% at 3,784 yuan/mt.

Margin ratio of the intra-day rebar futures lowered, and open interest of the most-traded contract increased by 144,800 lots. On the macro level, the National Development and Reform Commission stated that it will launch some measures to promote the development of the private economy in the near future to activate some market vitality, and steel prices hiked. In terms of fundamentals, this week's inventory data shows that rebar stocks kept piling up 0.3% WoW, but down 21% YoY. Balanced supply-demand fundamentals were reported.

Looking at the follow-up, macro market improved recently, given that the Central Committee of the Communist Party of China and the State Council issued the Opinions on Promoting the Development and Growth of the Private Economy, thereby sending ferrous metal prices higher. However, weaker terminal demand limited upside in steel spot prices. Therefore, higher rebar futures prices further widened its spread to spot prices. Under this circumstance, spots only changed hands at high prices.