Price trend

According to price monitoring data from SunSirs, prices for rebar and wire rods in the Jiangsu-Zhejiang-Shanghai region trended upward last week; the overall price level fluctuated higher as the effects of pre-holiday inventory restocking took hold. As of the 24th, the average price for HRB400 rebar in the region stood at approximately 3,187.84 RMB/ton—a week-on-week increase of 1.21%—while the average price for HPB300 high-speed wire rods reached 3,342.5 RMB/ton, up 0.75% from the previous week.

Fundamental Analysis

Market Overview: The market is currently operating within a volatile yet upward-trending pattern; the price centers for both futures and spot markets have shifted higher, and trading activity has improved compared to the previous period. In terms of market dynamics, last week was characterized by a pattern where "low-priced goods sold smoothly, while acceptance for high-priced goods remained limited." End-users continue to prioritize purchasing on an as-needed basis; however, expectations of future inventory replenishment have fostered a generally positive market sentiment.

Supply Side: Last week, the supply of the five major steel product categories totaled 8.6322 million tons—a week-on-week increase of 78,900 tons, or 0.9%. Notably, rebar production reversed its downward trend to post a slight increase of 17,900 tons, reaching 2.1493 million tons, with a capacity utilization rate of 47.12%. In terms of production processes, output from long-process mills rose by 8,000 tons to 1.8066 million tons, while output from short-process mills increased by 9,900 tons to 342,700 tons.

Although output rebounded month-on-month, its absolute level remains at a four-year low for this time of year, down 6.2% year-on-year. The increase in production was primarily driven by the resumption of operations at production lines across the North China, East China, and Northwest regions, with Jiangxi, Hebei, and Xinjiang leading the growth. Overall, the pace of production resumption at steel mills has been moderate, resulting in limited pressure on the supply side.

Regarding inventory: Last week, total rebar inventory stood at 7.6645 million tons—a substantial week-on-week decline of 355,100 tons (4.43%). The pace of inventory reduction accelerated further, reaching a recent high. Specifically, mill inventories fell by 132,700 tons to 1.8735 million tons, while social inventories dropped by 222,400 tons to 5.791 million tons. Although inventories have now declined for six consecutive weeks, the absolute level remains higher than that of the same period last year; thus, overall inventory pressure persists.

Demand Side: Performance on the demand side was the highlight of the week. As of April 24, the apparent consumption of rebar stood at 2.5044 million tons—a week-on-week increase of 120,600 tons (5.06%)—marking the ninth consecutive week of recovery. Demand has now entered its traditional peak season; the growth observed last week was notably stronger than in previous weeks, reflecting an accelerating release of seasonal demand.

Based on high-frequency indicators such as cement and concrete, nationwide cement shipments rose by 2.01% week-on-week last week, while the capacity utilization rate at concrete mixing stations increased by 0.46 percentage points; this corroborates that the pace of project commencements in the downstream construction sector has accelerated. The primary driver behind this demand recovery is the sustained resilience of infrastructure investment; however, steel demand from the real estate sector remains weak—with the floor area of new project commencements still declining by 17.1% year-on-year in March—thereby constraining the overall strength of demand.

Market Outlook

In summary, the building materials market is entering a critical window period ahead of the "May Day" holiday. While bullish and bearish factors are intertwined, supportive elements are relatively concentrated; consequently, prices are expected to exhibit a volatile yet upward-leaning trend. As next week marks the final full trading week before the holiday, steel mills in regions such as North and East China have already completed their pre-holiday stockpiling, resulting in a strong market inclination to hold up prices. Furthermore, inventories declined last week, and the pace of destocking is expected to accelerate further. Expectations for a third round of coke price hikes persist, hot metal production remains at high levels, and cost-side support is unlikely to waver in the short term. Meanwhile, strengthened policies regarding energy conservation and carbon reduction reinforce expectations of long-term supply constraints, thereby providing continuous support to market sentiment. However, bearish factors cannot be overlooked: weekly apparent demand—hovering around 2.5 million tons—may have already reached its peak for the traditional "peak season." With real estate investment down 11.2% year-on-year and new project starts down 20.3%, the market lacks sufficient momentum for a significant upward breakout in demand. Moreover, supply has shifted from a downward to an upward trajectory; should production continue to rebound while demand has already peaked, supply-demand imbalances could begin to accumulate once again. Based on this comprehensive assessment, rebar prices are expected to trend upward with some volatility next week; however, upside potential is capped by the ceiling on demand, and market participants should remain vigilant regarding the risk of a price correction following any pre-holiday surge.

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