SunSirs: Supply Declines, Demand Rises: Rebar and Wire Rod Prices May Rebound

Price Trends

According to SunSirs price monitoring, rebar and wire rod prices in the Jiangsu-Zhejiang-Shanghai region fluctuated within a narrow range last week. As of the 5th, the average price of HRB400 rebar in the region stood at approximately 3,154.5 RMB/ton, down 2.22% week-on-week. while the average price of HPB300 high-strength wire rod stood at 3,310 RMB/ton, down 2% week-on-week.

Market Conditions: Market sentiment cooled at the beginning of last week, with downstream demand remaining sluggish. Steel mills showed strong resistance to price cuts due to raw material costs, but overall terminal demand continued to lag. After market sentiment cooled, steel prices declined again, leading to narrow fluctuations and a weakening trend in rebar and wire rod prices throughout the week.

Inventory and Production

Supply Side

Last week's construction steel production totaled 3.0407 million tons, decreasing by 41,800 tons week-on-week, continuing the downward trend.

Rebar Production Rebar output saw a slight decrease last week, totaling 18,800 tons. Regionally, production declined in North China, Northeast China, and Southwest China, while other regions recorded increases. By province, Liaoning, Inner Mongolia, and Hebei led the reductions, primarily due to plant maintenance shutdowns and insufficient molten iron supply at some mills. Heilongjiang and Hunan saw rebar output rise as molten iron was redirected from certain mills.

For wire rod, production decreased slightly last week, with a combined reduction of 23,000 tons. Regionally, the decline was concentrated in North China, where supply decreased by 18,000 tons. Meanwhile, East China saw an increase of 5,700 tons, while other regions experienced minor adjustments. By province, Shanxi and Inner Mongolia showed significant declines, each reducing weekly output by 9,000 tons, while other regions saw minor fluctuations.

Inventory Last week, national construction material inventories reached 5.3999 million tons, rising by 170,900 tons week-on-week. Factory inventories continued to accumulate, increasing by 21,000 tons. Regionally, inventory growth was concentrated in East China and South China. By province, Jiangsu, Jiangxi, and Guangdong saw the largest inventory increases. For wire rod, factory inventories fluctuated slightly last week, increasing by a combined 3,800 tons. Regionally, North China led inventory growth with a 11,500-ton increase, while other regions experienced minor fluctuations. By province, Shanxi recorded the largest inventory increase, rising by 12,500 tons weekly. Taking rebar as an example, across the seven major regions, only Northwest China saw a weekly inventory drawdown of 1,200 tons, while all other regions accumulated inventory. East China and North China experienced the largest increases, with weekly inventory builds of 54,700 tons and 57,500 tons respectively. Taking rebar as an example, across the seven major regions, only Northeast China saw a weekly inventory reduction of 6,500 tons. All other regions experienced inventory accumulation, with North China and Central China recording the largest increases at 30,300 tons and 20,500 tons respectively.

Demand Side Last week's national average weekly transaction volume reached 96,960 tons, up 2,140 tons week-on-week. Transaction activity showed signs of recovery, maintaining above 90,000 tons, indicating resilient downstream terminal demand release. Weather conditions are expected to gradually improve after September, with downstream terminal operations slowly resuming, which will favor steel demand release.

In summary, SunSirs analysts believe that as weather impacts diminish, downstream demand will begin to recover. Meanwhile, steel mills maintain strong price-supporting intentions due to ongoing raw material cost pressures. The supply-demand dynamics for rebar and wire rod may shift toward reduced supply and increased demand, potentially leading to inventory drawdowns this week. Current price movements are primarily driven by market sentiment. Next week's prices are expected to rise initially before declining.

As an integrated internet platform providing benchmark prices, on September 10, the benchmark price for wire rod on SunSirs was 3,317.50 RMB/ton, down 1.78% from 3,377.50 RMB/ton at the beginning of the month.

On September 10, the benchmark price for rebar on SunSirs was 3,153.50 RMB/ton, down 2.25% from 3,226.00 RMB/ton at the beginning of the month.

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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