Rebar prices drifted lower this week. The nationwide average price now stands at 3,089 yuan/mt, down 20 yuan/mt WoW from last Friday. Supply side, steel mill margins continued to shrink. A few blast furnace steel mills have gradually arranged maintenance and production cut plans, but most are still operating at previous levels. Attention will remain on the extent of production cuts. Among EAF steel mills in different regions, margins diverged slightly. In southwest China, electricity price subsidies during the rainy season kept margins relatively favorable, and most mills maintained previous output levels for now. However, in east China, adjustments to critical peak electricity pricing during the summer led to shorter operating hours, while in south China, high inventory pressure at steel mills also prompted reduced operating hours. Overall EAF production declined. Demand side, intermittent rainfall in east China this week slowed project construction progress. In central and northwest China, low-priced inflows from other regions encouraged downstream buyers to adopt a wait-and-see stance. Overall transaction performance was mediocre. Inventory side, total inventory continued to edge up. Given weak demand expectations, social inventory will remain in a phase of periodic accumulation. Looking ahead, supply-side margins turned worse, weakening production incentives, but soft demand provides limited support to bottom prices. While raw material side saw some sentiment-driven momentum, the underlying rebar fundamentals remain weak. Short-term market prices are likely to consolidate near the bottom. Future attention will be on the pace of inventory buildup.
![In the short term, ferrous metals are consolidating at lows, and close attention should be paid to steel mill maintenance situations [SMM Steel Industry Chain Weekly Report]](https://imgqn.smm.cn/usercenter/nDTpN20251217171748.jpg)
