SunSirs: Rebar and Wire Rod Are Expected to Bottom Out and Recover in July

Price trend:

According to price monitoring by SunSirs, the market for rebar and wire rods last week (June 26–July 3) was characterized by an accelerated slide toward the bottom at the end of the month followed by a weak recovery in early July; prices showed signs of stabilizing after hitting interim lows. As of July 3, the average price of HRB400 rebar in the Jiangsu-Zhejiang-Shanghai region stood at approximately 3,097 RMB/ton, down 1.07% week-on-week, while the average price of HPB300 high-speed wire rod was 3,330 RMB/ton, remaining flat week-on-week.

In the spot market, prices for rebar and high-speed wire rod faced downward pressure throughout June, ending the month at their lowest levels of the period. According to price monitoring by SunSirs, as of the end of June, the average price of HRB400 rebar in the Jiangsu-Zhejiang-Shanghai region stood at 3,126.34 RMB/ton, down 2.47% from the beginning of the month, while the average price of HPB300 high-speed wire rod was 3,330 RMB/ton, a decline of 1.55%.

In the futures market, the benchmark rebar contract (2610) briefly dipped below the 3,100 RMB/ton mark on June 25 before gradually stabilizing. As July began, market sentiment improved; prices found support near 3,050 RMB/ton and staged a modest rebound.

Regarding trading activity, the market remained sluggish during the first half of the week—typical of the off-season—with traders eager to offload inventory and an increase in price-cutting to move stock. In the latter half of the week, as prices hit lows, some traders began tentatively restocking, leading to a temporary recovery in apparent demand.

Supply side: Supply-side pressure remains the primary factor weighing on steel prices. In mid-June, the daily output of finished steel products from key monitored steel enterprises reached 2.048 million tonnes—a month-on-month increase of 5.6%. This growth rate significantly outpaced that of crude steel (+0.8%) and pig iron (+0.7%), indicating an intensification of production resumption in the rolling stage. During the same period, finished steel inventories at these key enterprises stood at 17.90 million tonnes, marking a month-on-month rise of 1.03 million tonnes (+6.1%) and a year-on-year increase of 1.69 million tonnes (+10.4%).

The latest weekly data shows that as of the week ending July 2, total inventories of the five major steel products reached 16.2305 million tonnes—an increase of 220,600 tonnes week-on-week—with stock accumulation occurring across all categories: rebar, wire rod, hot-rolled coil, and cold-rolled coil. Total rebar inventory stood at 6.8989 million tonnes (up 65,000 tonnes week-on-week), while total wire rod inventory was 1.3197 million tonnes (up 62,800 tonnes week-on-week). High inventory levels continue to suppress the elasticity of spot prices. Regarding maintenance activity, 12 domestic steel mills have announced maintenance plans since June; notably, Licheng Taihang Steel shut down a 530m³ blast furnace on June 30, with a restart expected on July 20. While signals of supply-side contraction have begun to emerge, their impact is not yet strong enough to reverse the trend of inventory accumulation.

Regarding costs and profits, the cost side provided a temporary floor for steel prices last week. As for coke, the ninth round of price hikes has been fully implemented, while expectations for a tenth round continue to build. Safety inspections at coal mines have intensified; in Shanxi, only 95 mines have resumed production while 70 remain shut, meaning the outlook for supply recovery remains bleak. Regarding steel mill profitability, the gross profit per ton of rebar produced via blast furnaces continues to shrink, and construction steel production via electric arc furnaces has fallen into loss-making territory. However, the sustained rise in coke prices has directly driven up the cost of molten iron, providing a price floor for finished steel products from the raw material side. It is worth noting, however, that price trends for other raw materials—such as iron ore and scrap steel—have diverged, and the overall cost support they provide is weaker than that from coke.

Demand side: Overall demand remained low this week, though there were signs of marginal recovery. The latest data shows that the apparent demand for the five major steel products stood at 8.421 million tonnes, an increase of 271,600 tonnes week-on-week. Specifically, apparent demand for rebar was 2.1002 million tonnes (up 212,700 tonnes), while that for wire rod was 801,200 tonnes (up slightly by 7,800 tonnes). Following the drop in prices to low levels, traders began purchasing at lower rates, leading to a temporary rebound in apparent demand; however, the sustainability of this trend remains in doubt.

Regarding demand in the construction sector, hot and rainy weather throughout June continued to constrain outdoor construction activities. However, July marks a traditional seasonal transition period; with the "plum rain" season in the south expected to gradually wind down, there are anticipations of marginal improvements in construction conditions. In terms of the steel product mix, while the output of construction steel fell by 11.68% year-on-year, production of steel for manufacturing—including sections, special steel, and medium-heavy plates—recorded growth, establishing manufacturing-related steel as a core pillar of demand.

Market Outlook for July

In summary, the market for rebar and wire rod was characterized by downward pressure throughout June, driven primarily by the bearish combination of rising production and inventory levels; by month-end, prices had fallen to yearly lows. As July begins, signs of supply-side contraction are emerging, construction conditions are improving with the end of the rainy season, and rising coke prices continue to provide a cost floor, marking a market transition from a unidirectional decline to a phase of bottoming out at low levels. In the short term, high inventory and off-season demand will likely limit the scope for a rebound, with prices expected to fluctuate within a low range; in the medium term, a window for a temporary price recovery may open in mid-to-late July, though a structural trend reversal awaits clearer signals of improved supply-demand dynamics.

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