[SMM Rebar Daily Review] Weak Reality Constrains Spot Price Increase, How Long Can Sentiment-Driven Rally Last?

Futures market fluctuated today, with a slight uptick in the afternoon session, closing at 3,138, up 0.16% from the previous trading day. Spot side, most market quotations remained stable, with isolated instances of undisclosed price cuts for shipments, while overall price movements were relatively small. Transaction-wise, demand slightly pulled back WoW, with routine purchases at moderate levels. Fundamentally, EAF side, as spot prices rose, steel mill profits improved marginally, though most remained loss-making. Operating rates are expected to stay at mid-to-low levels in the short term, with limited room for significant increases. Blast furnace side, most steel mills reported moderate profits, maintaining steady production enthusiasm, leaving overall supply largely unchanged. Demand side, persistent high temperatures and rainy weather constrained construction progress at project sites, weakening routine purchases, with overall transactions largely driven by sentiment. In summary, under stable yet weak supply-demand conditions, weak fundamentals may cap spot price gains, with prices likely to remain in the doldrums tomorrow.