Price trend

According to the price monitoring of SunSirs, the prices of rebar and wire rod in Jiangsu, Zhejiang, and Shanghai regions fluctuated narrowly last week. As of the 18th, the average price of HRB400 rebar in Jiangsu, Zhejiang, and Shanghai regions was about 3,196 RMB/ton, with a 1% increase in circumference; The average price of HPB300 high line was 3,372 RMB/ton, with a weekly increase of 0.52%.

Analysis review

In terms of the market, the news of "anti involution" in the market continued to ferment last week, driving market sentiment to improve. Coupled with the rise in raw material prices, the support for raw material prices had moved up, and the market's willingness to pull up was high. Various markets raised prices, but overall demand in the terminal market had not improved. Therefore, last week's  wire rod and rebar prices had fluctuated narrowly and were trending towards stronger fluctuations.

Supply side

Last week's building materials production was 2.9541 million tons, with a month on month increase of 0.41 million tons and a slight increase in production. In terms of rebars, the production of rebar decreased by 77,800 tons. From a regional perspective, except for a slight increase in inventory in Northeast and North China, inventory in all other regions was showing a downward trend. By province, Yunnan, Hubei, and Guangdong had the highest inventory decline; In terms of wire rod, the factory inventory decreased slightly last week, with a total reduction of 7,800 tons. From a regional perspective, the inventory decline in the southwest region was higher, with a decrease of 7,100 tons, while steel mills in other regions experienced slight fluctuations in inventory to varying degrees; In terms of provinces, Yunnan's inventory decline ranked among the top, with a weekly decrease of 4,800 tons; In terms of hot coils, the inventory in the factory had slightly decreased last week, mainly concentrated in the Northeast and East China regions. Last week, market prices rebounded to a certain extent, and downstream purchasing sentiment had increased. At the same time, Vietnam had recently issued anti-dumping policies against China, and some export orders had accelerated the delivery of steel mills.

Inventory

Last week, the national building materials inventory was 4.1985 million tons, an increase of 0.41 million tons compared to the last week’s previous week. Last week, the factory's inventory showed an increasing trend, with a month on month increase of 0.41 million tons. Among them, inventory in Northeast, North, Southwest, and Northwest increased slightly, while inventory in East, Central South, and South China decreased slightly. By province, Henan and Jiangsu experienced the highest inventory decline; In terms of reel production, the factory's inventory increased from a decrease this week, with a total increase of 2,000 tons. From a regional perspective, the inventory growth in the North China region was among the highest, with an increase of 12,300 tons, while steel mills in other regions experienced slight fluctuations in inventory to varying degrees; Looking at each province, Shanxi's inventory growth rate ranked among the top, with a weekly increase of 13,800 tons. The East China region had reduced inventory by 61,600 tons, while the South and North regions had accumulated inventory of 8,600 tons and 0.06 million tons respectively; From the perspective of the seven major regions, except for North China and China, all other regions were in a state of destocking. In terms of hot coils, from the perspective of the three major regions, the northern periphery had a storage capacity of 16,100 tons, while the eastern and southern regions had accumulated 18,400 tons and 9,000 tons respectively; From the perspective of the seven major regions, except for South China, North China, and Northwest China, all other regions were in a state of accumulated inventory.

Demand side

Last week, the average weekly trading volume in China was 93,760 tons, a decrease of 0.552 million tons compared to the previous week. The trading volume continued to shrink, and the trading volume remained above 90,000 tons. Although downstream terminal demand was still being released, there was a trend of reduction, mainly due to the gradual warming of the weather at this stage, which limited the production of downstream terminals and was not conducive to the release of steel demand.

Future outlook:

In summary, analysts from SunSirs believe that the gradual increase in temperature at this stage led to a lack of release of demand from end-users; On the other hand, in terms of steel mills, production profits recovered after the rise in steel prices, and the production situation of steel mills had improved. The supply and demand of rebar and wire rod may continue to increase and decrease, and the process of destocking from social inventory was limited. As of July 19th, the price trend of rebar and wire rod was mainly affected by market sentiment, and it is expected that prices will rise first and then fall next week, with narrow fluctuations.

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