SMM daily comment on domestic rebar market (Aug 15)

SHANGHAI, Aug 16 (SMM) –

On the supply side, some BF steel mills resumed production. According to SMM research, in terms of construction materials, the maintenance-generated construction material production loss was 635,000 mt this week, down 25,600 mt WoW. In terms of EF, for the sake of diluting fixed costs, output of EF steel mills inched higher in Sichuan after Summer World University Games, but the overall output increment was limited. While other EF steel mills basically maintained the previous production status. The overall supply of construction materials edged up. On the demand side, the Central Bank's interest rate cut and a rally in rebar futures significantly shored up rebar trading sentiment, seeing more speculative demand and rigid terminal demand. Rebar market activity improved.

From the follow-up point of view, boosted by the Central Bank's interest rate cut, weak fundamentals may switch to strong expectations. In addition, the news of crude steel production restrictions in Jiangsu. On the cost side, iron ore prices hiked steadily. Prices of coking coal and coke prices stood stable. On the finished product side, currently, more unbalanced supply-demand fundamentals were reported. If the crude steel production restrictions materialized, the fundamentals materializes. Rebar prices may rebound.