[SMM Rebar Daily Review] Shortages of certain specifications exist in some regions, providing strong support for bottom prices

This week, rebar prices consolidated on a subdued note, but some markets experienced shortages of certain specifications, keeping bottom-end prices relatively firm. On the supply side, profitability at blast furnace steel mills recovered slightly, and with some mills completing temporary maintenance during the holiday, production has gradually returned to normal this week, leading to a notable rebound in output. Additionally, after the holiday, EAF steel mills found it easier to purchase steel scrap compared with the earlier period, and with margins still positive, some mills extended operating hours, resulting in a slight increase in overall electric furnace production. On the demand side, downstream restocking demand has been gradually released after the holiday, but as some northern markets enter winter, end-user purchasing enthusiasm has declined, making the sustainability of demand release harder to guarantee in the later period. In terms of inventory, both mill inventories and social inventories saw significant destocking this week, as downstream construction returned to normal, direct-supply demand from steel mills improved, and agents accelerated purchases to replenish tight specifications. It is understood that shortages of certain specifications currently exist in Henan, Fujian, Shandong, and other regions. In the short term, local steel mills have expectations for production increases, but until specifications are replenished, spot prices are likely to remain resilient to declines. Looking ahead, supply and demand fundamentals are currently in a weak balance, with limited upward or downward driving forces, and market trading sentiment remains influenced by raw material news. Spot prices are expected to move sideways next week.