[SMM Rebar Daily Review] Rebar Inventory Buildup Below Expectations, Market Sentiment Cautious Amid Weak Demand

Published: Feb 5, 2025 17:48

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[SMM Rebar Daily Review: Market Gradually Enters Holiday Mode, Prices Expected to Stabilize Next Week] Rebar futures opened today with a significant decline, closing at 3,320 points, down 1.51%. Spot rebar prices rose slightly on the first trading day after the Chinese New Year in some markets, but market activity fell short of expectations. On one hand, the decline in the futures market affected market sentiment; on the other hand, some traders in the market have not officially resumed operations yet...

Today, the futures market for rebar opened with a significant decline, closing at 3,320 points, down 151 points or 1.51%.

In the spot market, on the first trading day after the Chinese New Year, some markets saw slight price increases. However, market activity fell short of expectations, partly due to the impact of the futures market decline on market sentiment and partly because some traders have not yet officially resumed operations.

Fundamentally, during the Chinese New Year holiday, blast furnace steel mills maintained normal production except for some mills undergoing year-end maintenance as planned. EAF steel mills, which traditionally halt operations during the holiday, are expected to gradually resume production starting February 7. Overall, construction steel supply remains at a low level for the year.

Regarding inventory, market transactions were largely stagnant during the holiday, leading to inventory accumulation. In-plant inventory increased more than social inventory, and total inventory levels were lower than the same period in previous years. Overall inventory pressure is moderate.

On the demand side, according to the SMM survey, most downstream end-user construction activities are expected to gradually resume from February 7, with full recovery likely by the end of February. Currently, the market is characterized by weak supply and demand. Concentrated resources provide some support for spot prices, but upward movement faces resistance. In the short term, construction steel spot prices are expected to fluctuate rangebound.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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