Price trend

According to price monitoring by SunSirs, prices for wire rods and rebar in May followed a trend of rising first before falling. By the end of the month, the average price for HRB400 rebar in the Jiangsu-Zhejiang-Shanghai region stood at 3,193.34 RMB/ton, a decrease of 0.36% compared to the beginning of the month; meanwhile, the average price for HPB300 high-speed wire rods was 3,380 RMB/ton, an increase of 1.35% from the start of the month.

According to the commodity market analysis system of SunSirs, the rebar and wire rod markets in May generally followed a "rise-then-fall" pattern. The market trended stronger during the first half of the month but weakened amidst fluctuations in the second half. While the overall price level shifted upward compared to April, a distinct downward correction driven by selling pressure was evident by the end of the month. This month, the wire and rebar market exhibited a distinct "three-stage" trend: In the first ten days, pent-up end-user demand was released following the holiday period; price hikes by certain steel mills further fueled the rally, inventories continued to decline, and spot market quotes trended upward. In the middle ten days, following the conclusion of U.S.-China talks, speculative sentiment cooled; meanwhile, persistent overcast and rainy weather across many southern regions dampened market demand, leading to a slight decline in spot quotes. In the final ten days, a mining accident briefly drove up production costs, prompting a tentative rise in spot quotes; however, the onset of the rainy season—typically a slack period—in the south, coupled with strong downward pressure from short sellers, fostered a cautious market atmosphere, resulting in a weak, corrective adjustment in spot prices.

Factors Affecting Price

In May, both the weekly output and total inventory of wire rods and rebar declined.

Supply

Production of construction steel saw a slight increase in May, though overall output remained lower than in the same period last year. According to online data, the estimated domestic output of construction steel in May rose by 512,900 tons compared to April—an increase of 2.41%. Specifically, rebar production reached 12.5505 million tons, up 456,300 tons from April; meanwhile, the combined output of wire rods and coiled rebar totaled 8.8204 million tons, an increase of 56,600 tons over April. Despite decent profit margins for steelmakers and a general uptick in production volume, the market as a whole continues to face shortages in specific product specifications. A review of weekly data indicates that during the week of May 22–28, the supply of the five major steel product categories amounted to 8.6372 million tons—a week-on-week increase of 15,200 tons—driven primarily by a rebound in the production of rebar and wire rods, while the output of plates and coils declined.

From a broader supply-side perspective, China's rebar output in April totaled 15.112 million tons, a year-on-year decrease of 13.4%; cumulative output for the January–April period reached 56.841 million tons, down 13.5% year-on-year. Wire rod production in April stood at 10.460 million tons, a year-on-year decline of 10.7%; cumulative output for January–April was 42.112 million tons, down 4.7% year-on-year. These figures indicate that while the supply side showed month-on-month improvement, it remains in a contractionary trend on a year-on-year basis.

Data from key steel enterprises reveals that in mid-May, the average daily output of pig iron among major surveyed steelmakers was 1.879 million tons, a month-on-month decrease of 0.9%; meanwhile, the average daily output of finished steel products reached 2.007 million tons, a month-on-month increase of 3.3%. The month-on-month growth in finished steel output was primarily driven by the resumption of production lines that had previously undergone maintenance; however, pig iron output has already begun to show signs of a decline.

Demand

In May, the demand side exhibited a pattern characterized by a "surge-and-retreat" dynamic. Monthly consumption of construction steel in May totaled 29.8025 million tons, representing a 7.02% increase compared to April. Following the holiday period, as end-users gradually resumed operations and increased their procurement for inventory replenishment—bolstered by a phase-specific release of domestic demand—overall transaction volumes saw an uptick. For the week ending May 15, the apparent demand for rebar rebounded to 2.4252 million tons, driven primarily by the post-holiday release of demand for inventory restocking.

However, the full onset of the rainy season in the southern region has exerted significant downward pressure on demand. In late May, many parts of the South entered the *Meiyu* (plum rain) season; the resulting increase in rainfall directly hindered the progress of outdoor construction work, leading to a 3.4% week-on-week decline in apparent consumption. High-frequency indicators reveal that cement ex-warehouse volumes remain down 18.67% year-on-year, while capacity utilization rates at concrete mixing plants continue to trend downward, underscoring the persistent weakness in actual downstream construction demand. Guomao Futures noted, "Demand has now moved past its initial ramp-up phase; looking ahead, the May-June period may present a 'stress test' as the market faces the pressures of a seasonal off-peak season."

Sector-wise, real estate developers are facing tight liquidity conditions, resulting in a continued decline in both new project starts and total construction floor area. Infrastructure demand, meanwhile, remains robust and serves as a stabilizing force for the market, while demand from the manufacturing sector appears relatively strong.

Market Outlook:

In summary, analysts at SunSirs anticipate that the rebar and wire rod markets in May will generally trend upward, though they are expected to face downward pressure and retreat toward the end of the month. During the first half of the month, the market was driven upward by a confluence of cost-push factors and restocking demand; however, in the second half, prices retreated due to a triple-whammy effect: the rainy season in the southern region dampened demand, inventory depletion slowed down, and market sentiment turned bearish. The current construction materials market is situated within a critical transition window, shifting from a state of supply-demand equilibrium typical of the peak season to a looser market landscape characteristic of the off-season. Looking ahead to June, with the arrival of the traditional consumption off-season, a seasonal weakening of demand appears highly probable. Consequently, inventory depletion is expected to slow further, and cost support is likely to diminish marginally. It is projected that the construction materials market in June will continue to exhibit volatile and generally weak performance, with the overall price center shifting further downward compared to May.

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