SMM daily comment on rebar market (Aug 16)

SHANGHAI, Aug 17 (SMM) –

Rebar futures market closed up 1.31% at 3,713 yuan/mt. On the supply side, with the end of maintenance of BFs, maintenance-induced production losses inched down. In terms of EF, it was difficult to purchase steel scrap, and profits of EF steel mill failed to pick up. Therefore, the enthusiasm for production was low. Overall supply of construction materials was stable. On the demand side, there was a lack of news stimulation within the day, and rebar futures prices saw insufficient upward momentum. In addition, purchased aimed to meet rigid demand. The trading sentiment was weaker than yesterday, and the overall transaction volume shrank significantly.

Looking at the follow-up, on the raw material side, stable prices of iron ore, coking coal and coke will offer a boost to rebar prices. On the finished product side, BF steel mills will have a long way to go to reduce production, and demand will hardly improve in the short term. Therefore, unbalanced supply-demand fundamentals may linger. Before implementation of policy on crude steel production restrictions, rebar prices are unlikely to trend up.