[Daily Review of Rebar] Rebar futures prices drifted sideways amid poor spot transactions

Today's rebar futures prices drifted sideways and closed at 3788 yuan/mt, down 0.66%. The spot market price was mainly stable. The market speculation weakened amid strong wait-and-see sentiment, and the overall transaction volume was not in good condition. On the demand, the current infrastructure performance has not yet exerted its strength. The overall performance of real estate is generally weak, coupled with the weather factors and the slow pace of terminal construction, affecting the overall demand recovery.

On the supply, EF steel mills resumed intensively after Feb 24. However, considering the constraints on profit levels, valley power production is the main focus. As the center of iron ore and coke prices for BF steel mills shifted downward, raw material costs have declined. However, the current cash flow of steel mills is still tight, there is insufficient confidence in the market outlook, and the overall resumption of production is not as good as expected. According to SMM data, the total thread inventory this week was 11.885 million tons, an increase of 905,500 tons from last week, a month-on-month increase of 8.25%, and a year-on-year increase of 1.92%. Overall, the current changes in fundamentals are limited, and prices are expected to be rangbound in the short term. In the later period, we need to focus on the macro changes brought about by the two sessions and the inflection point of finished product inventory changes.