1. Price trend

According to the price monitoring of SunSirs, the prices of rebar and wire rod in Jiangsu, Zhejiang and Shanghai fluctuated narrowly last week. As of the 16th, the average price of HRB400 rebar in Jiangsu, Zhejiang and Shanghai was about 3184.22 RMB/ton, up 1.36% week-on-week; the average price of HPB300 high-strength wire was 3372.5 RMB/ton, up 0.15% week-on-week.

Market: Affected by macroeconomic policies last week, the market situation improved, the transaction situation in the steel market recovered in the first half of the week, and the release of terminal demand continued. Although the demand for replenishment of the terminal is still being released, the demand is not sustainable. The transaction fell in the second half of the week. The transaction volume last week was more than 100,000 tons, so the price of wire rod fluctuated strongly last week.

Inventory and output

Supply side:　The output of building materials last week was 3.1004 million tons, an increase of 0.84% ​​month-on-month, and the output began to grow. In terms of rebar, the output of rebar increased slightly by 30,000 tons, among which the output growth rate in North China and Northwest China was the highest. In terms of provinces, Xinjiang, Inner Mongolia, Jiangxi and other provinces have increased significantly due to the resumption of production of some steel mills; the output of rebar in Hubei, Anhui and other provinces has decreased slightly; in terms of wire coils, the output of wire coils fluctuated slightly last week, with a total reduction of 4,100 tons. In terms of regions, the reduction was mainly concentrated in East China and North China. The supply decreased by 9,000 tons and 5,400 tons respectively due to the maintenance of steel production lines and unsaturated production. At the same time, the increase in production in Southwest China was the highest, mainly due to the resumption of production of production lines due to maintenance in the early stage, and the supply increased by 9,400 tons. The output in other regions was mainly slightly fluctuated. In the short term, the output of rebar may be mainly adjusted in a narrow range.

In terms of inventory: Last week, the national building materials inventory was 4.992 million tons, a weekly decrease of 5.55%. Taking rebar as an example, the inventory of steel mills decreased by 32,800 tons month-on-month. In terms of regions, the inventory of central and southern China and southwest China decreased the most; the inventory of wire coils continued to rise, with a total increase of 13,500 tons. From a regional perspective, East China and Central China saw the largest increases, increasing by 6,100 tons and 7,300 tons respectively, while the inventories of steel mills in other regions fluctuated to varying degrees; from a provincial perspective, the inventory growth rates of Jiangsu and Shanxi were at the forefront. From the perspective of social inventory, except for South China, other regions are in a state of destocking. The current inventory continues to decline, and the pressure on factory and social inventories is relatively limited.

Demand side: Last week, the national average weekly trading volume was 109,980 tons, which recovered from the previous week, and the trading situation improved. The trading volume was close to 110,000 tons. Although the downstream terminal demand is still being released, it is showing a weak trend. The recent capital arrival rate of the downstream terminal has improved, but the boost to downstream demand is limited. In addition, the weather has entered the rainy season, and the release of terminal demand has weakened.

In summary, analysts from SunSirs believe that the downstream operation continues, but the plum rain season is approaching, and although the terminal demand is being released, it shows signs of weakening; as for steel mills, production profits have improved, production enthusiasm is good, and the support of the raw material end is temporarily stable, so it is likely to support prices. 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. However, there have been many changes in macro factors recently. It is expected that prices will fall first and then stabilize, and weaken in a narrow range this week.

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