This week, the 2101 rebar futures contract hit a new high for the year. Since the September low, this round of increase has exceeded 400 yuan/ton, which is higher than the previous mainstream market expectations. We believe that the peak season demand will not last long, and the supply pressure is still there, we recommend investors to take more orders to take profit.

Peak season demand pushes up prices

The release of demand in the peak season is the core factor driving the rise of rebar futures prices. The most direct evidence is that since the rebound at the end of September, several substantial increases in rebar futures prices have been accompanied by heavy trading in the spot market. On October 9th, the 2101 contract closed with an increase of 80 yuan/ton, and the transaction volume of 237 construction steel traders across the country was 347,700 tons, which set a record high in a single day; on October 28, the 2101 contract closed with an increase of 52 The transaction volume of 237 construction steel traders across the country was 269,700 tons, which was the second highest value in a single day in October; on November 9, the 2101 contract broke through and reached a new high for the year, with a closing increase of 77 yuan/ton. The transaction volume of 237 construction steel traders nationwide was 304,900 tons, which was the highest transaction value in a single day in November. In fact, the high volume of spot market transactions is a characteristic of peak season demand.

Spot transaction data reflects short-term demand, and medium-term demand mainly refers to data from downstream industries. On Monday, data released by the National Bureau of Statistics showed that the real estate industry indicators continued to rise. From January to October, real estate development investment increased by 6.3% year-on-year, an increase of 0.7 percentage points from the previous month; the area of new housing started increased by -2.6% year-on-year, an increase of 0.8 percentage points from the previous month. On the whole, the strong performance of the macroeconomic data in October has exceeded expectations, and China's economic recovery has shown resilience and flexibility, which has certain support for commodity prices and stock prices in cyclical industries.

Inventory data also verified the current strong demand. Since mid-October, rebar stocks have continued to be consumed, and the rate of consumption is still accelerating. In the past five weeks, the total rebar stocks fell by 839,300 tons, 575,700 tons, 769,100 tons, 876,600 tons and 1.0118 million tons respectively.