Price trend:

According to data from SunSirs, rebar and wire rod prices in the Jiangsu, Zhejiang, and Shanghai regions fluctuated narrowly last week. As of the 21st, the average price of HRB400 rebar in the region was approximately 3,148.66 RMB/ton, up 0.61% week-on-week; the average price of HPB300 high-strength wire rod was 3,325 RMB/ton, up 0.83% week-on-week.

Market Analysis

Market Overview: Last week, construction steel prices fluctuated upwards amid a struggle between strong expectations and weak reality. The market was boosted by expectations of maintenance and production cuts, leading to a positive sentiment, coupled with stable raw material costs, all contributing to the price increase. However, weak spot market transactions and limited release of end-user demand constrained the upward potential of prices, exhibiting a typical "sentiment-driven, cost-supported" characteristic.

On the supply side, construction material output reached 2.8689 million tons last week, an increase of 83,200 tons compared to the previous week, continuing its growth trend. The steel supply side showed a divergent trend last week: rebar output increased by 79,600 tons compared to the previous week, with increases in North China and South China due to steel mills resuming production and increasing output, while East China and Central South China saw slight decreases; wire rod output remained generally stable, with a significant increase in Hebei province in North China; hot rolled coil output also rebounded due to the completion of maintenance at steel mills in Northeast China. Overall, supply pressure was rising moderately.

Regarding inventory, the national construction material inventory last week was 4.6217 million tons, a decrease of 205,100 tons week-on-week. Steel mill inventories generally showed a destocking trend this week. Rebar mill inventories decreased by 71,000 tons, with most regions experiencing declines except for slight increases in North China, Northeast China, and Northwest China, with East China showing the most significant destocking. Wire rod mill inventories also decreased by 48,000 tons, with North China leading the decline. Hot rolled coil inventories showed regional divergence, with accumulation in East China and significant destocking in South China. Overall inventory pressure continued to ease.

On the demand side, the national average weekly transaction volume the week before last was 100,400 tons, an increase of 2,600 tons week-on-week. So far, the transaction volume of building materials was higher than the previous week, with a slight increase in transactions, remaining above 100,000 tons, indicating that downstream end-user demand still had some resilience. As downstream end-user operations continued, the resilience of steel demand remained.

Market outlook

In summary, analysts at SunSirs believe that the construction steel market last week exhibited a pattern of "strong expectations, weak reality." While slower production growth, anticipated maintenance shutdowns, and cost support provided upward momentum for prices, weak end-user demand and sluggish transactions limited the potential for further increases. Given the interplay of these factors, it is expected that national construction steel prices will continue to fluctuate within a range next week, with upward movement constrained by weak demand and downward movement supported by cost and supply expectations.

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