SMM Daily Comment On Domestic Rebar Market (Sep 7)

SHANGHAI, Sep 7(SMM) – Rebar futures fluctuated downward and closed at 3,795 yuan/mt, down 0.43% from the previous trading day. Spot market prices mostly fell by 10-20 yuan/mt. On the supply side, according to SMM research, the blast furnace operating rate this week was 93.46%, an increase of 0.3% WoW. However, rebar profits were poor, thus the molten iron was partially diverted to produce other steel types. Electric furnace steel mills showed low production enthusiasm due to losses, resulting in a slight decline in the overall supply of rebar. Demand markets were weak and most steel prices fell slightly during the day. The trading atmosphere was depressed, but there were still few speculative purchases. Except for Fujian where the impact of the typhoon had not subsided, end users in other regions were still mainly purchasing for rigid needs.

In the follow-up, on the raw material side, molten iron output is currently running at a high level, and coke prices are most likely to rise. In addition, the demand for coke is acceptable, and the cost support is strong. As for finished steel, the rebar inventory dropped by 239,000 mt this week, accelerating the destocking and easing the imbalance between supply and demand. With frequent issuance of favorable macroeconomic policies, market sentiment may improve. However, market confidence has not been fully restored, and short-term rebar prices may still face downside risk.