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

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.