1. Price trend

According to the price monitoring of SunSirs, the prices of rebar and wire rod in Jiangsu, Zhejiang and Shanghai fluctuated in a narrow range last week. As of the 10th, the average price of HRB400 rebar in Jiangsu, Zhejiang and Shanghai was about 3141.44 RMB/ton, down 1.31% week-on-week; the average price of HPB300 high-strength wire was 3367.5 RMB/ton, down 0.3% week-on-week.

Market: The transaction situation in the steel market fell last week, the release of terminal demand was weak, and the difficulty of merchants shipping increased. Although the demand for replenishment at the terminal is still being released, the average weekly transaction volume has fallen, and the transaction volume last week was more than 100,000 tons, so the price of wire rod and rebar was weak last week.

Inventory and output

Supply side　Last week, the output of building materials was 3.0745 million tons, and the output fell 3.16% month-on-month, and the output continued to shrink. In terms of rebar, the output of rebar decreased slightly by 98,000 tons, and the output in East China, Central South, and North China decreased the most. By province, Hubei, Jiangxi, Jiangsu and other provinces saw a decrease in output due to the transfer of molten iron and maintenance and production reduction of individual steel mills; the output of rebar in Fujian, Heilongjiang, Yunnan and other provinces increased slightly; the output of wire coils fluctuated slightly, with a total decrease of 1,600 tons. In terms of regions, the reduction was mainly concentrated in East China and Southwest China. The supply decreased by 21,200 tons and 9,600 tons respectively due to the maintenance of steel production lines and unsaturated production. At the same time, the output in Northeast China and North China increased the most, and the output of the production lines resumed in the early stage increased, and the supply increased by 10,800 tons and 9,400 tons respectively. The output in other regions was mainly slightly fluctuated. At present, the profits of steel mills are still acceptable, and the output of rebar is unlikely to continue to decline in the short term.

In terms of inventory, the national building materials inventory was 5.2856 million tons last week, a week-on-week decrease of 1.09%. Taking rebar as an example, the factory inventory increased, increasing by 151,100 tons month-on-month. In terms of regions, the production decline in East China, Central South, Southwest and other regions was the largest; the wire coil factory inventory turned from decline to increase, with a total increase of 37,300 tons. In terms of regions, except for a slight decline in the Northwest region, the inventory of steel mills in other regions increased to varying degrees; in terms of provinces, the inventory decline in Jiangsu and Yunnan was at the forefront. In terms of social inventory, except for the cumulative inventory in East China and South China last week, the rest of the regions showed a destocking state, among which North China had the largest destocking, with a weekly destocking of 42,700 tons. After the holiday, due to the relatively concentrated arrival of resources, the destocking range was significantly narrowed.

Demand side Last week, the national average weekly transaction volume was 102,730 tons, which fell week-on-week, and the transaction situation weakened. The transaction volume was above 100,000 tons. Although the downstream terminal demand was still being released, it showed a weak trend. The recent capital arrival rate of downstream terminals has rebounded slightly, but the boost to downstream demand is limited, and the release of terminal demand has weakened.

In summary, analysts from SunSirs believe that downstream operations continue, and the terminal is still releasing demand but is somewhat weak; as for steel mills, production profits are still acceptable and production enthusiasm is good, and the support of the raw material end is temporarily stable, so prices are likely to remain firm. The supply and demand of wire rod and rebar may turn to a trend of increasing supply and decreasing demand, and the destocking process is good, but there have been many changes in macro factors recently.

It is expected that prices may rise first and then fall this week, and the price will weaken in a narrow range.

If you have any questions, please feel free to contact SunSirs with support@SunSirs.com.