January 10 Rebar-Coil Spread

On January 10, the spread between the most-traded HRC and rebar contracts was 110 yuan/mt, up 2 yuan/mt MoM; the spread between Shagang's HRC in Zhangjiagang and Zhongtian's rebar in Hangzhou was 40 yuan/mt, up 2 yuan/mt MoM

. This week, the spread between the most-traded HRC and rebar contracts fluctuated within the 100-110 yuan/mt range, narrowing WoW. The fundamentals of rebar were slightly better than HRC, and the decline in spot rebar prices was smaller than that of HRC. Looking ahead, considering the synchronized weakening of steel demand around the Chinese New Year, although HRC demand showed stronger resilience than rebar, the production pressure of HRC was greater than that of rebar. It is expected that the short-term spread between HRC and rebar will lack significant drivers and remain within the 110-130 yuan/mt range.