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From a fundamental perspective, in the EAF sector, steel mills continue to face losses, and steel scrap prices remain high, which is expected to keep operating rates low. In the blast furnace sector, steel mill profits are moderate, and production enthusiasm is high. There is an expectation of a decrease in the impact from maintenance on rebar rolling lines in the short term. On the demand side, persistent high temperatures and blue rainstorm warnings in some regions make it difficult for end-use demand to increase and easy for it to decrease. With supply increasing and demand decreasing, the fundamental contradictions in the construction steel market are gradually accumulating. According to the SMM survey, the total rebar inventory this week was 5.1467 million mt, down 0.39% WoW, with inventory depletion at a relatively low rate. Overall, the fundamental situation in the construction steel market remains relatively unchanged. In the short term, prices are likely to fluctuate based on macroeconomic expectations. The market still has expectations for the July Political Bureau meeting, and the most-traded contract may hold up well. Subsequent attention should be paid to the implementation of production restriction rumors in steel mills in Hebei and southwestern regions, and caution should be exercised to prevent a market sentiment downturn leading to a jump initially and then pull back in construction steel prices.
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