[SMM Construction Steel Inventory: Stable Supply and Increasing Demand Accelerate Destocking of Construction Steel. Can the Destocking Speed Be Maintained After the Holiday?] This week, the total inventory of construction steel continued to destock. The total inventory of rebar decreased by 5.94% WoW, and the total inventory of wire rod decreased by 7.27% WoW.

On May 1, SMM reported that the total rebar inventory for the week was 6.1678 million mt, a decrease of 389,600 mt WoW, down 5.94% WoW, and down 25.16% YoY on the lunar calendar. The total wire rod inventory nationwide was 1.1916 million mt, a decrease of 93,500 mt WoW, down 7.27% WoW, and down 32.93% YoY on the lunar calendar.

This week, the ferrous metals series fluctuated rangebound, with the average price of steel rising slightly WoW. On the news front, a meeting of the Political Bureau of the CPC Central Committee emphasized accelerating the issuance and utilization of local government special bonds and ultra-long-term special treasury bonds, among others. It also highlighted the need for timely RRR cuts and interest rate cuts to maintain ample liquidity, strengthen support for the real economy, expand consumption, and stabilize foreign trade, injecting a "shot in the arm" into the market. During the week, rumors of production restrictions circulated in the market again, prompting an immediate rally in steel futures prices. However, as no mandatory production restriction policies were subsequently implemented, the market once again engaged in a tug-of-war between bullish and bearish sentiments. On Wednesday, the National Bureau of Statistics released data showing that the manufacturing PMI for April was 49.0%, down 1.5 percentage points from the previous month...

[SMM Rebar Daily Review: How Will Prices Trend After the Holiday as Downstream Stocking Demand is Released Before the Holiday?] Today, rebar futures fluctuated and closed at 3,096, down 0.42% from the previous trading day. On the spot cargo side, as the market gradually entered the holiday period, spot cargo quotes in various regions were largely stable, with prices in some regions easing by 10-20 yuan/mt, and overall trading performance was average.

According to the SMM survey, as of April 30, the operating rate of blast furnaces at 242 steel mills surveyed by SMM was 88.89%, up 0.31 percentage point MoM. The capacity utilisation rate of blast furnaces was 90.94%, up 0.45 percentage point MoM. The daily average pig iron production of the sampled steel mills was 2.4535 million mt, up 12,000 mt MoM.

The General Office of the Ministry of Finance issued a notice on the 29th, stating that the Ministry of Finance plans to conduct the first renewal issuance of ultra-long-term special treasury bonds (Phase II) for 2025. The renewed treasury bonds are 30-year fixed-rate coupon bonds, with a total face value of 71 billion yuan in competitive tendering, and no additional bidding will be conducted for Category A members. The coupon rate of the renewed treasury bonds remains the same as that of the previously issued treasury bonds of the same maturity, at 1.88%.

[SMM Steel Morning Meeting Summary] In terms of supply, the impact from HRC maintenance this week was 40,600 mt, unchanged WoW. Next week, the impact from HRC maintenance is expected to be 112,600 mt, an increase of 72,000 mt WoW. Short-term supply will remain at a high level. Demand side, restocking demand before the holiday was released during the weekend and part of the week, but prices fluctuated significantly, leading to relatively cautious restocking overall. Cost side, steel mills may have expectations of restocking raw materials before the holiday, but with limited increases in pig iron output, the support from raw materials is neutral. Overall, the imbalance in HRC fundamentals is relatively small, and inventory before the holiday maintains a good downward trend. Currently, there are expectations that the timing of the actual demand decline will be postponed, and there are still expectations for macro policy efforts. However, in the short term, the time window before the holiday is short, and the most-traded contract is expected to fluctuate rangebound. During the holiday, overseas risks still exist, and it is recommended to maintain a light position.

[SMM Daily Rebar Review: Labour Day Holiday Approaches, Will Construction Steel Prices Remain Weak?] Today, rebar futures fluctuated downward, closing at 3,100, down 1.21% from the previous trading day. On the spot cargo side, quotes in most regions loosened, with declines ranging from 10 to 30 yuan/mt. Market sentiment significantly weakened compared to the previous two days, and trading atmosphere was poor. Additionally, as restocking before the holiday was largely completed, traders mostly maintained a wait-and-see attitude, and overall trading performance was average throughout the day.

[Operating Rate of Steel Mills Using Externally Purchased Billets (SMM Survey)] According to the SMM survey, as of April 29, the operating rate of steel mills using externally purchased billets, which mainly produce construction steel, was 34.64%, up 12.5 percentage points from the operating rate at the end of March, and up 9.14 percentage points YoY.

[SMM survey: Rebar and coiled rebar production in Central China's rolling lines shifts from decline to growth as Labour Day holiday approaches] During the survey period (April 22 - April 28), the capacity utilisation rate of rebar rolling lines in Central China increased slightly; the operating rate and capacity utilisation rate of wire rod rolling lines both increased.