Market Trends:

According to price monitoring by SunSirs, prices for rebar and wire rods in the Jiangsu-Zhejiang-Shanghai region last week exhibited a volatile yet generally weak trend, with their price levels shifting slightly downward. As of the 10th, the average price for HRB400 rebar in the region stood at approximately 3,140 RMB/ton—a week-on-week decline of 0.58%—while the average price for HPB300 high-speed wire rods was 3,302.5 RMB/ton, down 0.53% from the previous week.

Market analysis

Market Overview: Significant shifts occurred on the macroeconomic front last week. Regarding the situation in the Middle East, a temporary ceasefire agreement between the U.S. and Iran officially took effect on April 8; consequently, energy prices—including crude oil—retreated significantly. As the market's sensitivity to macroeconomic factors diminished, the pricing of ferrous commodities gradually reverted to being driven by fundamental factors. In terms of industrial policy, Luo Tiejun, Vice Chairman of the China Iron and Steel Association (CISA), revealed that various government ministries are currently studying and refining measures to regulate production capacity and output. The core objective is to curtail excess capacity, with a specific focus on facilitating the orderly exit of outdated and inefficient production facilities. Furthermore, the Ministry of Industry and Information Technology (MIIT) issued an official announcement last week identifying the first batch of "leading-edge" and standard-compliant enterprises that meet the *Normative Conditions for the Iron and Steel Industry*; this development has continued to fuel market expectations regarding supply-side policies.

Supply Side: Last week, the supply side for rebar exhibited a distinct acceleration in activity. According to Mysteel data, for the week ending April 9, rebar production reached 2.1559 million tons—a week-on-week increase of 84,900 tons (4.1%)—marking the second consecutive week of rapid production growth. Concurrently, the daily average output of hot metal rebounded to 2.3938 million tons, up 0.84% from the previous week. This production increase was primarily concentrated in the East and South China regions, driven chiefly by the concentrated resumption of production lines following the holiday period. In terms of the "Big Five" steel product categories, overall steel output maintained a recovery trajectory throughout the week, signaling the gradual release of supply-side elasticity.

Regarding inventory: Last week, rebar inventory continued its downward trend of depletion, though the magnitude of the decline narrowed significantly. As of April 9, total rebar inventory stood at 8.272 million tons—a month-on-month decrease of 135,500 tons (1.61%), which was lower than the 211,600-ton reduction recorded the previous week. Specifically, social inventory amounted to 6.1966 million tons (down 124,400 tons month-on-month), while mill inventory totaled 2.0754 million tons (down 11,100 tons month-on-month). The combined total inventory of the five major steel product categories declined by 2.03% month-on-month. The primary reason for the slowdown in inventory depletion is that rapid growth in production—coupled with limited incremental demand—has resulted in a narrowing of the supply-demand gap. Although the market remains within an inventory-depletion phase, the rate of depletion has clearly begun to moderate.

Demand Side: Demand remained sluggish, emerging as the primary constraining factor in the market last week. Data indicates that apparent consumption of rebar this week totaled 2.2914 million tons—a mere week-on-week increase of 8,800 tons (0.39%)—marking a significant deceleration in growth compared to the week prior. This stands in stark contrast to the 4.1% increase in production, thereby highlighting a distinct market dynamic characterized by "rising output and lagging demand." Regarding construction material transactions, on April 2, 237 major traders recorded sales of construction steel totaling only 96,200 tons—a substantial week-on-week decline of 9.5%. As of April 10, the transaction volume for construction materials among major traders (based on a five-day moving average) stood at 100,366 tons; while this represents a 2.96% week-on-week increase, the overall volume remains at a relatively low level compared to the same period in recent years. Regarding work resumption, although the rate of project restarts at construction sites has improved, the recovery of steel demand within the real estate sector remains slow. Furthermore, the availability of funding for infrastructure projects still requires improvement; consequently, end-user procurement is currently driven primarily by essential needs, with speculative demand remaining scarce.

Market outlook

In summary, analysts at SunSirs anticipate that the building materials market will continue to exhibit a volatile yet generally weak trend. The core market conflict currently lies in the divergence between "rising production and slowing demand"—weekly output rose by 4.1% to 2.1559 million tons, while apparent consumption saw only a marginal increase of 0.39% to 2.2914 million tons, resulting in a continuously widening gap between the growth rates of supply and demand. Cost-side support has visibly weakened; the implementation of the ceasefire agreement between the U.S. and Iran has driven down prices for energy and iron ore, and should long-term iron ore supply contracts be finalized, the central level of raw material costs would be further depressed. Although inventories have declined for four consecutive weeks, the rate of reduction has narrowed from 3.09% last week to 1.61%, signaling a warning as the pace of destocking slows. On the policy front, expectations regarding capacity control measures provide a floor of support; however, against a backdrop of sluggish demand recovery (with building material transaction volumes hovering near multi-year lows) and the continued realization of supply-side elasticity, there is insufficient upward momentum. Market participants should closely monitor changes in production growth rates, the pace of inventory reduction, and raw material prices; a cautious approach is recommended in the short term.

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