SMM Daily Comment on Rebar Market (Apr 20, 2023)

SHANGHAI, Apr 20 (SMM) – Rebar futures prices closed down 0.66% at 3,914 yuan/mt today. Some steel mills in Shanxi and Sichuan began to cut output to tackle thin profits, easing oversupply pressure slightly. Despite lower rebar prices, end users restocked mainly as needed. Overall demand was weak. Stocking by steel mills ahead of the upcoming International Workers’ Day (May 1) will support iron ore prices. Meanwhile, pre-holiday stockpiling by end users will underpin steel prices.

In the medium term, iron ore demand will soften as more steel mills carry out maintenance. This, coupled with bearish macro environment, will weigh on iron ore prices. In the absence of cost support, rebar prices will face downside risks.