Price Trends
According to price monitoring by SunSirs, the wire rod and rebar market exhibited a volatile yet generally weak trend last week (May 15–22). The price levels for both futures and spot markets shifted downward compared to the previous week, and market sentiment transitioned from the post-holiday optimism and strength to a cautious "wait-and-see" stance. As of May 22, the average price of HRB400 rebar in the Jiangsu-Zhejiang-Shanghai region stood at approximately 3,210.5 RMB/ton—a week-on-week decline of 1.55%—while the average price of HPB300 high-speed wire rod was 3,380 RMB/ton, down 1.02% from the previous week.
Market Analysis
In the spot market, the SunSirs benchmark price for rebar was quoted at 3,223.66 RMB/ton, showing a slight decline compared to the beginning of the week. The national average price for rebar fell by approximately 20 RMB/ton over the week, while the average price for hot-rolled coils dropped by about 30 RMB/ton. Regionally, market trends in the North and South continued to diverge: the Northern region demonstrated relative resilience against price declines due to robust demand, whereas the Southern region saw dampened market activity—with trading limited primarily to sporadic purchases driven by immediate necessities—as the full onset of the plum rain season hindered outdoor construction projects.
In the futures market, rebar futures traded within a weak, volatile range throughout the week. On May 21, the benchmark rebar contract (2610) fell by 0.50%, while hot-rolled coil declined by 0.73%. Rebar futures closed at 3,255 RMB/ton on May 15, subsequently trending downward. Open interest has steadily declined from a high of 2.173 million lots recorded at the beginning of the month, reflecting that some long positions have opted to exit the market and adopt a wait-and-see stance.
In terms of trading activity, the market atmosphere remained sluggish, with end-users primarily engaging in purchases driven by immediate, essential needs. On May 21, the nationwide trading volume for construction steel totaled 83,157 tons—a daily decrease of 5.24% and a weekly decrease of 10.44%. Overall, the market exhibited a distinct pattern: sales at lower price points proceeded reasonably well, while transactions at higher price levels faced resistance.
Supply Side: Last week, rebar production continued its upward trend, although absolute output levels remained at a low point relative to the same period in recent years. As of May 15, rebar production had rebounded to 2.014 million tons—a week-on-week increase of 47,500 tons. From a process perspective, output from long-process mills saw a marginal increase, while short-process production rose by 38,200 tons to reach 314,700 tons; this growth was primarily driven by improved per-ton steel margins, which incentivized the resumption of production lines.
However, amidst a low-margin environment, rebar supply is expected to remain at a relatively low level. Currently, hot metal is gradually being diverted toward industrial steel products, which offer better profit margins; consequently, it is unlikely that rebar production will see any significant increase. In early May, the average daily crude steel output among key steel enterprises stood at 2.11 million tons—a month-on-month increase of 3.6%, yet still reflecting a year-on-year decline.
Regarding inventory: Last week, total inventory continued to decline, albeit at a slower pace. As of May 15, total rebar inventory fell by 411,200 tons to 6.8594 million tons; specifically, social inventory decreased by 288,200 tons week-on-week, marking a continuous decline for several consecutive weeks. However, structural shifts warrant attention: data from May 21 indicates that while total inventory continued to be drawn down, the rate of depletion slowed, and mill inventories began to accumulate. Inventory pressure is shifting from the social market to the steel mills; should demand continue to weaken, an inflection point in inventory levels could emerge sooner than anticipated.
Demand Side: The demand side is characterized by a pattern of "pulsed release followed by a subsequent decline." As of May 15, the weekly apparent demand for rebar rebounded by 447,100 tons to reach 2.4252 million tons, driven primarily by the release of restocking demand following the holiday period. However, with the full onset of the rainy season in southern China last week, weekly apparent consumption declined by 3.4% week-on-week, signaling a clear weakening of demand.
Based on high-frequency indicators, while cement shipments showed a sequential uptick, they still recorded a year-on-year decline of 18.67%; meanwhile, capacity utilization rates at concrete mixing plants continued to fall year-on-year, indicating that actual demand from the downstream construction sector remains weak. Sluggish demand in the real estate sector remains the primary constraint on rebar demand—within the downstream market, real estate construction accounts for 45% of demand, while infrastructure (at 35%) serves a stabilizing role; however, with the year-on-year growth in new real estate construction starts remaining consistently negative, the medium-to-long-term ceiling for demand is clearly defined.
Market Outlook
In summary, the current market for rebar and wire rods is at a critical juncture, transitioning from a state of supply-demand equilibrium typical of the peak season to a looser market environment characteristic of the off-season. In the short term, cost support and inventory reduction continue to provide a floor for prices, though upward momentum remains notably weak. In the medium term, a triple pressure—comprising weakening demand due to the rainy season, a moderate rebound in supply, and a slowdown in inventory depletion—is expected to gradually manifest. Consequently, the rebar and wire rod market is projected to maintain a weak, volatile trend over the coming week, with the price center likely shifting moderately downward.
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