Fundamentals continue to improve, with strong downside resistance at bottom prices

Published: Sep 28, 2026 17:15 (GMT+8)

Save

Before the Mid-Autumn Festival, rebar prices drifted higher overall. After the holiday, market sentiment weakened due to macro factors, but spot bottom prices remained relatively firm, with demand still being released in some markets. On the supply side, steel mills' losses have not improved significantly recently, and most have maintained previous production levels. However, a few mills, anticipating restocking demand before the double holiday, diverted some hot metal back to construction steel, resulting in a slight production increase. Most EAF steel mills are operating at profitable levels, generally running during off-peak and flat electricity tariff periods, but extending operating hours further would push them into losses. Therefore, EAF steel mill operating rates are expected to remain at mid-range levels in the short term. On the demand side, terminal project restocking demand surged before the Mid-Autumn Festival, with a small amount of demand still being released after the holiday. However, as the National Day holiday approaches, the overall purchasing pace is nearing its end. Additionally, some projects remain cautious about stockpiling, only securing enough supply for holiday-period needs. As a result, some demand is expected to be released in a concentrated manner after the National Day holiday. On the inventory front, mill inventories and social inventories saw significant destocking last week, but with demand declining WoW this week, the destocking speed may slow noticeably. Looking ahead, supply-demand fundamentals continue to improve, and spot prices show strong downside resistance. However, coking coal and coke prices are expected to be cut after the holiday, and the downward shift in costs may cap upside for spot prices. Meanwhile, phased demand release is still expected after the holiday, providing some support for bottom prices. Post-National Day market prices are expected to move sideways within a narrow range, with limited room both upward and downward.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

1 min ago

[Steel billet price adjustment]

[Steel billet price adjustment] On September 28, the ex-factory price of ordinary square billet in Qian'an, Tangshan was reduced by 20 yuan, tax included, to 2,980 yuan/mt. [SMM Steel]

1 min ago

13 mins ago

[Brief Comment on China Iron Ore] Iron ore prices in the Liaodong region are likely to consolidate on a subdued note

Iron ore prices in the Liaodong region were slightly lowered, with the current price of 65% grade iron ore concentrates on a dry basis, excluding tax, at 825 yuan/mt. Production is currently relatively stable, but steel mills are experiencing significant overall losses and have a relatively strong willingness to push for lower prices on domestic concentrates. Local iron ore concentrate prices

13 mins ago

18 mins ago

[SMM EU Weekly Review] ADI Outage Widens North-South Divide; Quota Reset and Melt & Pour Rules Loom

Last week, the EU HRC market exhibited a pronounced North-South divergence. Northwest Europe (NWE) HRC quotes retreated to 734 EUR/tonne EXW, while Italian HRC stood firm at 736 EUR/tonne EXW, directly reflecting stronger price support in the south. On the delivered front, Italian delivered prices surged to 820-830 EUR/tonne, whereas NWE dropped to 780-795 EUR/tonne, highlighting sluggish northern demand against southern resilience. The import market remained extremely thin, with Italian HRC import prices assessed at 690 USD/tonne CIF. Southern European trades centered around Turkish resources at 555-570 EUR/tonne CFR, while Indian offers hovered uncompetitively at 625 EUR/tonne CIF. This massive southern restocking wave was directly driven by ArcelorMittal Italy (ADI) halting its coke ovens and its sole operating blast furnace (BF2, ~2 million tonnes/year capacity) since September 16. On the macro-policy front, October 1 marks two critical nodes: the quarterly quota reset and the formal initiation of the "Melt and Pour" origin evidence obligation. Furthermore, the European Parliament overwhelmingly voted on September 17 to expand CBAM to downstream products like fasteners and wire rod. Looking ahead to next week, if the October quota release exhausts rapidly as seen historically, the import arbitrage window will slam shut, driving domestic prices higher again. Supported by ADI's production cuts and slab restocking, the Italian market is expected to remain firm, whereas NWE will lag due to high service center inventories and sluggish destocking. The region will maintain a strong but regionally divergent posture.

18 mins ago