SHANGHAI, Aug 15 (SMM) –
Rebar futures prices closed down 0.84% at 3,641 yuan/mt, hitting a record low in this quarter.
On the supply side, current profit erosion shifted BF-based steel mills towards profitable materials, and led EF-based steel mills to hover around a break-even point. Their incentive to produce rebar was weak, slightly cutting rebar production. On the demand side, terminal demand in various places picked up amid waning impact of extreme weather, but sliding rebar future prices dragged down prices of finished products. Rebar market activity appeared muted amid prudent sentiment.
From the follow-up point of view, weak social financial data was released last Friday. On the raw material side, a range-bound movement of iron ore prices was reported, and coke prices temporarily stabilized after four rounds of increases. On the finished product side, more unbalanced fundamentals were felt from impact of a slack season demand lingering and prolonged pick-up of inventory. Cost support and a rally in demand will leave rebar prices with limited room to creep down on the near-term horizon. Impact of real estate data to be issued tomorrow on steel prices will deserve to be watched.
