SunSirs: Demand Was Weak, the Prices of Rebar and Wire Rod Slightly Declined This Week (September 4-8)

Price trend

According to the price monitoring of SunSirs, the prices of rebar and wire rods in the Jiangsu, Zhejiang and Shanghai regions had slightly decreased this week. As of the 8th, the average price of HRB400 rebar in the Jiangsu, Zhejiang and Shanghai regions was about 3,719.56 RMB/ton, a decrease of 0.46% compared to the beginning of the week; the average price of HPB300 high line was 3905.2 RMB/ton, a decrease of 0.58% compared to the beginning of the week.

Analysis review

Market aspect:

As the weekend approached, the national engineering demand was 82,808 tons, a 25.86% increase compared to the previous trading day. From January to July, the construction area of real estate development enterprises' houses was 7,996.82 million square meters, a year-on-year decrease of 6.8%. Among them, the residential construction area was 563,026 million square meters, a decrease of 7.1%. The newly constructed area of houses was 569.69 million square meters, a decrease of 24.5%. Among them, the newly constructed residential area was 415.46 million square meters, a decrease of 25.0%. The completed area of houses was 384.05 million square meters, an increase of 20.5%. Among them, the completed residential area was 279.54 million square meters, an increase of 20.8%.

According to data from the General Administration of Customs, in August 2023, China exported 8.282 million tons of steel, an increase of 974,000 tons compared to the previous month, a month on month increase of 13.4%; From January to August, a total of 58.785 million tons of steel were exported, a year-on-year increase of 28.4%. From the data, the domestic steel export volume had reversed its two consecutive months of decline and reached the second highest level within the year.

Inventory and Production

This week, the weekly production and total inventory of rebar decreased slightly, while the weekly production and total inventory of wire rod increased slightly.

On the upstream side, the coke market continued to remain stable; Port iron ore continued to experience weaker fluctuations at high levels; The scrap steel market was weak and stable, with some regions experiencing downward adjustments. Spot prices were stabilizing and weakening; The customer was passive in purchasing, the transaction had not recovered, there was not much rigid demand, and the transaction was still weak. There was no bulk purchase at the construction site, and intermediaries were looking for low-priced purchases. In a single day, large inventory customers sold over 2000 tons, while small and medium-sized companies issued orders for 300-500 tons.

Market outlook

Although overall demand was weak, the government had lowered the interest rate on existing housing loans, which was beneficial for real estate. The traditional peak season of Golden September had boosted to some extent, and it is expected that the trend of rebar and wire rod prices will be mainly weak and stable in the short term.

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