SunSirs: Rebar Production Shifted from Decline to Growth, and Construction Steel Prices Fluctuated at Low Levels Under Pressure

Price trend

According to price monitoring by SunSirs, the markets for rebar and wire rod continued to fluctuate at low levels last week (July 3-10); spot price levels edged down slightly, and overall market sentiment remained weak, though the pace of the decline slowed significantly. As of July 10, the average price of HRB400 rebar in the Jiangsu-Zhejiang-Shanghai region stood at approximately 3,094.34 RMB/ton, down 0.09% week-on-week, while the average price of HPB300 high-speed wire rod was 3,335 RMB/ton, up 0.15% week-on-week.

Regarding the spot market, data from SunSirs shows the benchmark price for rebar at 3,097 RMB/ton, down 0.78% week-on-week, while the price for wire rod remained flat at 3,330 RMB/ton. The national average price for 20mm Grade III seismic-resistant rebar across major cities was 3,281 RMB/ton, a weekly decline of 30 RMB/ton; the average price for 8.0mm HPB300 high-speed wire rod was 3,449 RMB/ton, down 24 RMB/ton week-on-week. Regional performance varied: prices in East, South, Central, and North China saw slight declines of 20-30 RMB/ton, while the Northwest region experienced a steeper drop of 50 RMB/ton; prices in the Southwest remained unchanged compared to the week before last.

In the futures market, the dominant rebar contract (2610) closed at 3,091 RMB/ton on July 9, continuing to trade at the lower end of the 3,050-3,100 yuan range. The dominant contract had previously switched to the 2611 series on July 7; it closed at 3,076 RMB/ton—a slight decline of 1 RMB/ton—with an increase in open interest, indicating persistent divergence between bullish and bearish sentiment.

Market Analysis

Regarding market activity, steel prices last week were characterized by hovering at low levels and a slowing downward trend. Weakness persisted through the first half of the week, but as prices hit yearly lows, some traders began tentatively restocking, leading to a marginal improvement in transaction volumes.

Supply side: Last week, the supply side signaled bearish trends. Rebar production shifted from a decline to an increase, rising by a cumulative 32,700 tonnes to 2.1652 million tonnes; this growth was primarily driven by the resumption of blast furnace and production line operations at certain steel mills in North and East China. Wire rod production stood at 864,000 tonnes, remaining flat week-on-week.

Data from late June warrants particular attention: the daily output of finished steel products from key steel enterprises reached 2.218 million tonnes—an increase of 8.3% month-on-month—whereas daily crude steel output fell by 3.6% over the same period. The resumption of production in the rolling sector was significantly more vigorous than in the ironmaking sector, resulting in a marked rise in the supply of finished steel; consequently, the supply side continues to exert downward pressure on prices.

Regarding costs and profits, the cost side is providing temporary support for steel prices. The ninth round of coke price hikes has been fully implemented, while expectations for a tenth round continue to build. Gross profit margins per tonne of blast-furnace rebar have continued to shrink, and electric-arc furnace (EAF) production of construction steel has fallen into loss-making territory. The proportion of profitable mills among the 247 surveyed has declined from a previous high of 64.07% to 51.08%. However, the cost factor currently presents a "double-edged sword" effect: on one hand, rising coke prices directly increase the cost of hot metal, limiting the scope for a sharp drop in steel prices; on the other hand, persistently narrowing profit margins will force mills to cut production—a move that, if it triggers a negative feedback loop, could depress raw material prices and subsequently weaken cost-based support.

Demand side: Weakness characteristic of the off-season persists. Apparent demand continued to soften during this traditional off-season; however, high cost support helped moderate the decline in finished steel prices. A report by the China Index Academy indicates that the real estate market remains in a bottoming-out phase in 2026, with the total floor area of newly sold commercial housing projected to fall by 7.8% year-on-year; low levels of new construction starts and real estate development investment are directly dampening demand expectations for rebar.

PriceSeek has assigned a bearish score of -1 to both rebar and wire rod, viewing weak real estate demand as a significant bearish factor for construction steel prices.

Market outlook

In summary, the rebar and wire rod markets continued to fluctuate at low levels last week (July 3-10). A shift from decline to growth in rebar output (+32,700 tonnes) put an end to expectations of supply contraction, while persistently weak real estate demand dampened demand outlooks; additionally, inventories remained 2.61 million tonnes (+19.5%) higher year-on-year, meaning the supply-demand imbalance has yet to be effectively alleviated. In the short term, upward pressure on coke prices provides a floor that limits the scope for sharp declines, yet high inventory levels and weak demand constrain rebound momentum, suggesting prices will largely continue to fluctuate within a low range. In the medium term, July represents a critical window where the interplay between "forced production cuts" and "policy expectations" plays out, and a directional shift is imminent.

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