[SMM Rebar Daily Review] Construction steel prices may continue to fluctuate in the short term. Attention can be paid to production restrictions in North China and policy meeting trends in the future.

Today, the futures market experienced volatile trading, with prices rallying slightly towards the end of the session, closing at 3003, down 0.20% from the previous trading day. In the spot market, most quotes dropped slightly, with declines ranging from 10 to 20 yuan/mt, and overall trading performance was mediocre throughout the day. From a fundamental perspective, on the supply side, in terms of the EAF route, a few steel mills have resumed production as planned, while some others have added new maintenance and shutdown plans due to expanding losses, resulting in relatively small changes in overall supply. In terms of the blast furnace route, according to SMM's weekly maintenance survey, the impact from maintenance on construction steel was 1.2642 million mt, a decrease of 4,700 mt WoW, indicating a slight increase in supply. However, considering the earlier timing of this year's military parade, North China may implement crude steel production restrictions due to environmental protection-related controls. Therefore, it is expected that there will still be a reduction in construction steel supply in the future. On the demand side, affected by high temperatures, construction steel remains in the off-season for demand. Most regions report limited driving force from the futures market, and spot trading performance is average. Overall, currently, both supply and demand for construction steel are weak, and fundamental contradictions are gradually accumulating. However, the market still has expectations for rumors of production restrictions and the July Political Bureau meeting. The tug-of-war between bulls and bears has intensified, so it is expected that construction steel prices will continue to fluctuate in the short term.