Price trend

According to the price monitoring of SunSirs, the prices of wire rods and deformed steel bars rose first and then fell in November, and rose slightly at the end of the month. As of the end of the month, the average price of HRB400 rebar in Jiangsu, Zhejiang and Shanghai was 3,787.78 RMB/ton, up 3.74% from the beginning of the month;c

Analysis review

As shown in the figure above, in November, the output of wire rods rose, the output of deformed steel bars fell, and the total inventory fell at a low level.

In terms of market: from January to October, the construction area of houses of national real estate development enterprises was 8,888.94 million square meters, down 5.7% year on year. Among them, the residential construction area was 6,282.78 million square meters, down 5.9%. The newly started housing area was 1,037.22 million square meters, down 37.8%. Among them, the newly started residential area was 759.34 million square meters, down 38.5%. The completed housing area was 465.65 million square meters, down 18.7%. Among them, the completed residential area was 337.71 million square meters, down 18.5%.

Supply and demand: Affected by profits, the steel output continued to decline, but after the recent price rebound, the profitability of steel mills had improved, and the profitability of 247 steel enterprises had rebounded from 10% to 24%. In the absence of continuous and deep losses, the willingness of the blast furnace to actively reduce production will weaken, the profit of the electric furnace will decline, and the production increase will slow down. The demand continued to decline month on month, and the seasonal impact gradually increased. In recent weeks, the average demand for thread remained above 3.2 million tons, higher than last year, and the inventory of factories and communities was at a historical low. After entering the off-season, demand and inventory faced certain pressure.

Market outlook

To sum up, the prices of wire rods and rebar were relatively firm in November due to their low inventories. But in the traditional off-season, the demand was limited. In December, with the impact of the off-season gradually increasing, according to the annual comparison chart of SunSirs in the past five years, except for December 2020, the price is rising, the rest of the year is falling. It is expected that the prices of wire rod and rebar in December will be lower than those in November.

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