[SMM Rebar Daily Review] Policy signals boost steel prices, market competition intensifies, beware of prices jumping initially and then pulling back

Today, the futures market fluctuated upward, closing at 3,065, up 2.61% from the previous trading day. On the spot market, most market quotes increased, with gains ranging from 10 to 60 yuan/mt, driving a slight release of market speculative demand. However, real demand purchases remained weak, and overall trading performance was average. From a fundamental perspective, on the supply side, in the EAF sector, recently, some steel mills resumed production due to considerations of maintaining market share and safeguarding employee rights, while some others planned new shutdowns and maintenance due to expanding losses. According to SMM's weekly survey, the operating rate of 50 electric furnace steel mills nationwide, which mainly produce construction steel, was 31.86%, up 0.48% MoM from the previous period. In the blast furnace sector, most steel mills still had profits and maintained normal production rhythms, with overall supply remaining basically stable. On the demand side, in terms of news, yesterday, the Central Financial and Economic Affairs Commission held a meeting to make arrangements for addressing cut-throat competition, driving the futures market upward and slightly improving market speculative demand. However, construction steel is still in the off-season for demand, with real demand transactions remaining limited. It is necessary to closely monitor market sentiment in the future to guard against a potential jump initially and then pull back in construction steel prices due to weakening market sentiment.