Data show that at a time when supply continues to surge, apparent consumption of rebar has surpassed last year's peak. So what is the actual situation of terminal requirements?

According to SMM research, the "progress bar" for the resumption of projects under construction at the end site has been loaded to 93.2 per cent. Among them, the actual operating rate of the infrastructure industry reached 94.5% (up 34.7% from the end of March), and the actual operating rate of the construction industry reached about 92% (up 56.3% from the end of March). With the exception of the northeast region, where the epidemic situation is relatively more serious, the personnel arrival rate is on the low side-only about 80%, and the actual operating rate in other areas is more than 90%.

Figure 1: apparent demand trend of Thread from 2019 to present

Source: SMM

Figure 2: status of employees in construction enterprises as of April 26

Source: SMM

In terms of funds, 26.4 per cent of terminal companies currently say there is a shortage of funds or that funds are expected to tighten at a later stage. Among them, from a sub-industry point of view, 23.8% of the housing construction projects said that the financial problem has become a burden of construction, but some of them said that with the gradual opening of commercial housing, inventory slightly digested, the financial problem will be alleviated. 36.4% of infrastructure projects indicate funding problems in the short term.

It is worth noting that about 67.9% of terminal enterprises said that new projects would be started in the next three months, while 35.9% of terminal enterprises said that there was a need to rush to work and were in the midst of continuous recruitment. In addition, it is obvious that the proportion of hand-held new construction projects is higher, and the demand for rush work is more urgent, and later will become an important force to support the demand for building materials, thus helping to raise the spot price of building materials.

Table 1: there is significantly more room for growth in the later stage of infrastructure demand.

Source: SMM

To sum up, the current terminal demand has basically returned to the normal level, and although the supply side is under pressure under the high output and inventory, in view of the fact that there is still some room for recovery in the later stage of terminal demand, building materials inventory will be in the process of continuous destruction. there is no room for a sustained and substantial decline in spot prices.

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