SMM daily comment on domestic rebar market (Aug 23)

SHANGHAI, Aug 24 (SMM) –

Rebar futures prices fluctuated and closed up 1% at 3,723 yuan/mt. Spot prices increased by 10 - 60 yuan /mt. On the supply side, according to SMM research, the operating rate of blast furnace steel mills was 92.71%, the same as last week, and the operating rate of the electric furnace steel mills was 40.03%, an increase of 0.06 percentage points WoW. Supply remained basically stable and market prices fluctuated at highs. However, the concentrated procurement of the terminal market Tuesday led to muted demand yesterday. Meanwhile, speculative demand weakened, resulting in a significant contraction in transactions yesterday.

From the follow-up point of view, due to the joint influence of funds and news, the crude steel prices rose sharply recently, so the cost support has been strengthened and the market risk appetite has rebounded. Although the seasonal impact on demand tends to weaken, the off-season lingers, and the upward momentum is obviously insufficient. The implementation strength of the production reduction policy was lower than market expectations, so the pressure on the supply side was not eased obviously. It is expected that short-term steel prices may continue to fluctuate within a narrow range.