SMM daily comment on domestic rebar market (Aug 18)

SHANGHAI, Aug 21 (SMM) –

Iron ore rose strongly again, while other ferrous metals weakened. Rebar futures prices closed down 0.11% at 3,700 yuan/mt, while rebar spot price was higher than futures. On the supply side, profits standing at a break-even point led to EF steel mills’ weak enthusiasm for production, while some BF steel mills resumed operation from scheduled maintenance. Under such circumstance, rebar supply inched up. On the demand side, with a lack of news stimulation within the day, rebar futures market softened. Trading sentiment turned weak. The downstream transactions continued to be dominated by rigid demand purchases, but there were still some low-price speculations. From the follow-up point of view, even if assured implementation of crude steel output limit is seen, there will still be a certain delay in the implementation. In addition, pig iron output will be high. Therefore, the fundamentals of iron ore will be acceptable. North China-based steel mills planned to cut coke prices, which is expected to be implemented next week. In a word, overall cost support will remain. On the finished product side, boosted by a peak season in September and October approaching, and post-flood reconstruction needs in some areas, demand for rebar may continue to increase slightly. If there are more news of crude steel output limit, steel prices may continue to fluctuate upward.