[SMM Rebar Daily Review] Weak Balance of Supply and Demand Coupled with Favorable Factors to Be Realized, Construction Steel to Maintain a Wait-and-See Attitude in the Short Term

Rebar futures moved downwards after a higher opening today, closing at 3,098, up 0.19% from the previous trading day. On the spot price front, driven by favourable macro news, spot prices in some regions increased by 10-20 yuan/mt, while overall trading performance remained moderate. Fundamentally, on the supply side, according to the SMM survey, poor profits at EAF steel mills coupled with weakening demand led some EAF mills in south China to reduce operating hours, while some mills in central and south-west China also underwent temporary maintenance due to raw material procurement issues. The national EAF operating rate dropped to 36.52% this week, down 1.82% WoW. On the demand side, the construction steel market cooled in May, as continuous rainfall during the flooding season in south China disrupted construction site schedules. Overall, the supply-demand imbalance in fundamentals remains moderate. Macro-level measures such as RRR cuts, reductions in housing provident fund loan interest rates, and progress in China-US talks still require time to take effect. Market sentiment remains cautious, with merchants adopting a prudent approach. Short-term construction steel prices are expected to fluctuate, and future attention should focus on macro-level developments.