On August 28, the price of Zhongtian rebar stood at 3,180 yuan/tonne. Market data indicates that 25,000 tonnes were released from warehouses yesterday—a decrease of 6,000 tonnes compared to the same period last week—while rebar inventory in Hangzhou reached 1.132 million tonnes, an increase of 53,000 tonnes week-on-week.
Steel Market Remains Characterized by Weak Supply and Demand; Rebound Potential for Rebar is Limited:
Yesterday, steel prices in East China saw partial increases of 10 RMB/tonne alongside a surge in trading volume. Market rumors suggest that a third round of coke price hikes is commencing today, further strengthening cost support. Coupled with data showing steel mills cutting production and reducing stocks—thereby improving the supply-demand structure—steel prices continued to rebound during the night trading session. Last week, blast furnace operating rates rose slightly while capacity utilization dipped marginally, leading to a slight decline in molten iron output. Meanwhile, operating rates and capacity utilization for electric arc furnaces continued to fall; short-process mills maintained production cuts due to losses, resulting in an overall contraction of steel supply. Regarding demand, speculative interest in construction materials saw a slight recovery, whereas demand for flat steel weakened; overall end-user demand remains in the off-season lull. Total steel inventories continued to decline, easing inventory pressure. In summary, the combination of contracting supply, ongoing inventory reduction, and expectations of rising costs driven by the rapid implementation of the second round of coke price hikes pushed market prices into a fluctuating upward trend. However, the lack of substantial improvement in end-user demand limits the scope for further rebounds. The short-term strategy is primarily one of "wait-and-see," looking for opportunities to short the market once the rebound concludes.
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