Under the weak supply and demand situation, the rebar price will fluctuate narrowly in the short term.
July 17 Rebar under the support of iron ore performed relatively strongly, but the latest domestic steel production and inventory data in the afternoon showed weakness. The Guangda Futures black team stated that the current rebar spot market is in a situation of weak supply and demand, with a slight accumulation of inventory but still at a low level, and insufficient market contradictions and drivers. It is expected that the rebar futures market will likely consolidate within a narrow range in the short term.
Specifically, My Steel （ Mysteel ）Data shows that, as of the week ending July 17, national rebar production fell by 76,000 tons to 2.0906 million tons week-on-week, and decreased by 144,100 tons year-on-year; social inventories increased by 106,700 tons week-on-week to 3.7016 million tons, and decreased by 2.0841 million tons year-on-year; factory inventories fell by 77,800 tons week-on-week to 1.731 million tons, and decreased by 189,000 tons year-on-year; rebar apparent demand fell by 153,300 tons to 2.0617 million tons, and decreased by 252,700 tons year-on-year. "Rebar production continued to fall, inventories accumulated slightly, and apparent demand fell significantly, with data showing weakness." Qiu Yuecheng, chief research director of Guangda Futures' black research team, commented.
According to him, on the supply side, the current period is the traditional off-season for rebar consumption, steel mills are increasing seasonal maintenance, and some steel mills are using molten iron to prioritize the production of other products, causing rebar production to continue to decline. On the demand side, the recent situation of funds for engineering projects remains low, and end-user demand continues to be weak, with sluggish market transactions.
From Monday to Wednesday, the average daily transaction volume of building materials nationwide was 93,200 tons, a week-on-week decrease of 6.15%; the average daily shipment volume of rebar in the Hangzhou market was 31,800 tons, a week-on-week increase of 2.49%; the Hangzhou market rebar inventory increased to 600,000 tons. According to data from the National Bureau of Statistics, fixed asset investment increased by 2.8% year-on-year from January to June, a decrease of 0.9 percentage points from the growth rate from January to May; among them, real estate, infrastructure, and manufacturing investment decreased by 11.2%, increased by 4.6%, and increased by 7.5% year-on-year respectively. The year-on-year decline in real estate investment widened by 0.5 percentage points compared to January-May, and the year-on-year growth rate of infrastructure and manufacturing investment both fell by 1 percentage point compared to January-May. The widening decline in real estate investment and the narrowing growth in infrastructure and manufacturing investment indicate sluggish domestic steel demand.
However, Qiu Yuecheng also mentioned that overall steel exports remain high. From January to June, steel exports reached 58.15 million tons, a year-on-year increase of 9.2%, with exports in June reaching 9.68 million tons, a year-on-year increase of 10.7%. Strong export growth has largely offset the shortfall in domestic demand.
In summary, the Guangda Futures black team expects the rebar futures market to likely consolidate within a narrow range in the short term.
