Inventories continue to decline slightly, and rebar prices may consolidate with a slight upward bias in the short term.
On July 10, black series commodities rose across the board, Rebar also strengthened significantly. After the release of the latest domestic steel production and inventory data in the afternoon, the Guangda Futures black team stated that although the current rebar spot market is in a situation of weak supply and demand, with inventories continuing to decline slightly during the off-season, and insufficient market contradictions and drivers, the market has strong expectations for production cuts recently. It is expected that the rebar futures market will likely fluctuate and strengthen in the short term.
Specifically, My Steel （ Mysteel ）data shows that, as of the week ending July 10, national rebar production fell by 44,200 tons to 2,166,600 tons week-on-week, and decreased by 105,600 tons year-on-year; social inventories fell by 52,500 tons to 3,594,900 tons week-on-week, and decreased by 2,250,400 tons year-on-year; factory inventories increased by 4,100 tons to 1,808,800 tons week-on-week, and decreased by 131,300 tons year-on-year; rebar apparent demand fell by 33,700 tons to 2,215,000 tons, and decreased by 137,800 tons year-on-year. “Rebar production has fallen slightly, inventories continue to decline slightly, and apparent demand has fallen slightly. The data shows a neutral to strong performance,” said Qiu Yuecheng, director of black research at Guangda Futures.
According to him, on the supply side, the profits of long-process steel mills are currently high, and the losses of short-process steel mills have also narrowed. However, affected by production restrictions in Tangshan, Shanxi, and other places, as well as the off-season maintenance of some steel mills, rebar production has decreased. On the demand side, China is currently in the off-season of high temperature and rain, and terminal demand is at a low level. However, with improved expectations, speculative demand has increased.
Mysteel monitoring data shows that the average daily transaction volume of building materials nationwide from Monday to Wednesday was 93,400 tons, a week-on-week decrease of 12.57%; the average daily outbound volume of rebar in the Hangzhou market was 30,900 tons, a week-on-week increase of 0.24%; the Hangzhou market rebar inventory dropped to 584,000 tons.
In addition, Qiu Yuecheng also mentioned that the current rebar spot market is in a situation of weak supply and demand, with inventories continuing to decline slightly during the off-season, and insufficient market contradictions and drivers. Recently, the market has strong expectations for production cuts. It is understood that steel mills in Shanxi Province have received notices of production restrictions, requiring each steel mill to refer to the 2024 annual benchmark level of crude steel production (60.28 million tons) and implement production reduction measures of 10%-30%, reducing crude steel production by 6 million tons throughout the year.
Overall, the Guangda Futures black team expects the rebar futures market to fluctuate and strengthen in the short term.
