Rebar rebound market

Supply has been slow to pick up
Because the demand of square steel tube for sale has not been fully started, the impact of the cost of steel bar is more obvious, the short-term price has fallen significantly. However, later with the end demand and destocking process open, rebar prices are expected to stop falling and rebound.

After the Spring Festival, rebar plate surface has fallen significantly, but its fundamental change is not big, still in the background of low production, low inventory, the price decline of rectangular hollow section is more driven by iron ore. With the end of the holiday, steel terminal demand is expected to gradually open, rebar short-term adjustment or end, the rebound market is expected to open.

Iron ore fell from highs
Iron ore prices have continued to rise amid environmental restrictions, pressure on demand and record port inventories, which have attracted the attention of regulators. Iron ore prices have fallen nearly 20 per cent from their highs amid tighter regulation. Iron ore is the main factor in the composition of steel production cost like structural steel pipe, in the background of finished material demand has not been fully started, the price of rebar is greatly affected by the cost end, which also leads to a significant decline in the price of rebar, but the trend is obviously stronger than iron ore.

There is still a short-term shortage of scrap
In the first and second weeks after the Spring Festival, pig iron production showed a counter-seasonal decline from the previous month. As of February 18, the average daily pig iron output of 247 steel mills was only 2.03 million tons, so the overall supply of rebar is very small. Although the steel mill is expected to resume production, but it is still in the heating season production limit time, “2+26” cities require the production to decline 30% of the policy has not changed, and the production limit of mild steel tube in the first quarter will still affect the recovery of steel production.

In addition, the high cost of electric furnace steel is also an important factor limiting production recovery. At present, the production cost of short process rebar is around 4900 yuan/ton, short-term scrap is still in shortage, and the fiscal and tax No.40 will be implemented in March, will also have an impact on the short-term scrap supply. Considering the production limit of long process steel mills and the high cost of short process, the following rebar supply will pick up, but the recovery is expected to be slow, will remain relatively low year-on-year level.