[SMM Rebar Daily Review] Inventory Increases Slightly After the Holiday, Construction Steel Prices Fluctuate While Searching for Bottom

Today, rebar futures fluctuated downward, closing at 3052, down 1.74% from the previous trading day. In terms of spot prices, as the futures market weakened, spot prices in most regions fell by 10-30 yuan/mt. Market transactions were mainly focused on low-priced resources, and the overall trading situation remained average. On the supply side, production profits for construction steel at BF and EAF steel mills diverged. Blast furnaces maintained relatively decent profits and mostly continued normal production, while EAF steel mills faced poor profitability and difficulties in scrap collection, leading to shortened operating hours and even production halts at some EAF steel mills. On the demand side, construction site operations were disrupted during the holiday, compounded by the onset of the rainy season in south China after the holiday, resulting in generally weak downstream demand. Additionally, considering that downstream construction sites had already stockpiled materials before the holiday, procurement activities slowed during the holiday and picked up only slightly after the holiday. This led to a slight accumulation of construction steel inventory and increased inventory pressure. According to the SMM survey, the total rebar inventory stood at 6.1434 million mt, up 1.65% WoW. Overall, there is currently a slight accumulation of construction steel inventory, with demand falling short of expectations and market sentiment remaining cautious. It is expected that construction steel prices may maintain a weak and volatile pattern in the short term.