[SMM Rebar Daily Review] Stable supply amid off-season demand, limited upward momentum for construction steel prices in the short term

Today, the futures market operated in a volatile manner, closing at 2,997, up 0.23% from the previous trading day. In the spot market, most quotations rose slightly, with increases ranging from 10 to 30 yuan/mt, and overall trading performance was average throughout the day.

From the fundamental perspective, on the supply side, the issue of difficulty in collecting scrap for EAF steel mills persisted. Except for Chengdu, where profits were relatively good due to electricity subsidies, EAF steel mills in most regions suffered from worsening losses, and their operating rates remained low. Most blast furnace steel mills still had profits and maintained normal production rhythms, with overall supply changes being relatively small. On the demand side, as the plum rain season ended in south China, the region entered a phase of high temperatures and heatwaves. In north China, high temperatures persisted, and downstream end-users may adjust outdoor work schedules to avoid peak hours. It is difficult for demand to improve during the off-season, and the upward momentum for construction steel prices is limited. Additionally, on the macro side, the China Iron and Steel Association proposed recommendations to relevant national ministries and commissions to restrict billet exports, which may affect market confidence to a certain extent. Therefore, it is expected that construction steel prices will be in the doldrums tomorrow.