[SMM Rebar Daily Review] Rebar futures hold up well, closing up 1.89%. Policy rumors spark a wave of spot cargo price increases

Today, rebar futures held up well, closing at 3,123, up 1.89% from the previous trading day. In terms of spot prices, market prices rose slightly in the morning. In the afternoon, driven by favorable rumors, rebar futures fluctuated upward, and spot prices across regions followed suit. The price increase for the whole day ranged from 10 to 50 yuan/mt, with trading performance stronger than yesterday. On the supply side, profits from blast furnace and EAF processes continued to diverge. Blast furnace steel mills enjoyed considerable profits, maintaining moderate production enthusiasm. Only a few steel mills had good order-taking for specialty steel products, with profits stronger than those for rebar, leading to a slight shift of pig iron towards specialty steel production. EAF steel mills faced poor profitability and difficulties in collecting scrap, mostly maintaining production during off-peak and mid-peak electricity hours. On the demand side, "Danas" continued to bring heavy rainfall to south China, while muggy weather "set in" in the north, affecting construction work at many sites. The market remained in the traditional off-season for demand. However, today, driven by the upcoming Central Urban Work Conference and rumors of "restarting shanty town renovations," the market trading atmosphere warmed up. According to the SMM survey, the total rebar inventory this week was 5.0998 million mt, down 0.91% WoW, with inventory continuing to decline and overall inventory pressure relatively small. In summary, the current contradiction in the supply and demand fundamentals is not prominent. Short-term futures and spot prices are likely to fluctuate with the heat of news. It is expected that rebar prices may fluctuate at highs, with caution advised against the risk of construction steel prices pulling back due to weakening market sentiment.