SunSirs: Demand Was Weak, Wire Rod and Rebar Prices Were Weak in the Peak Season in September

Price trend

According to the price monitoring of SunSirs, the price of wire rod and rebar fluctuated and rose in September. As of the end of the month, the average price of HRB400 rebar in Jiangsu, Zhejiang and Shanghai was 3,963.33 RMB/ton, up 1.23% from that at the beginning of the month; the average price of HPB300 high line was 4,218 RMB/ton, up 1.05% from that at the beginning of the month.

Analysis review

According to data from SunSirs, in September, the output of wire rod and rebar increased, and the total inventory was low.

Market: From January to August, the housing construction area of real estate development enterprises was 8,686.49 million square meters, a year-on-year decrease of 4.5%. Among them, the residential construction area was 6,136.04 million square meters, down 4.8%. The newly started housing area was 850.62 million square meters, down 37.2%. Among them, the newly started residential area was 624.14 million square meters, down 38.1%. The completed housing area was 368.61 million square meters, down 21.1%. Among them, the completed residential area was 267.37 million square meters, down 20.8%.

Supply and demand: In September, weekly production fell and weekly inventories rose. Under the expectation of peak season and profitability, steel mills will still actively produce, and the pressure on the supply side remains unsolved. Judging from the 2022 semi-annual report data disclosed by real estate companies, there are only a handful of companies showing positive growth in revenue and net profit, and a sharp drop in profits has become the norm in the industry. The credit risk of real estate enterprises has not been cleared, the unsatisfactory return of funds and the tightening of the financing environment have led to the continued increase in the credit risk of the real estate industry.

Market outlook

To sum up, near the end of the month, the downstream restocking is active before the holiday, and the demand is obviously heavy, which boosts market sentiment and drives the steel price to fluctuate higher, but the supply remains high, and the continuous improvement of demand after the holiday is doubtful. October is still the traditional peak season, but the real estate is sluggish and the supply is high. It is expected that the price of wire rod and rebar will fluctuate within a narrow range in October.

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