Recently, Liang Taigeng, general manager of Shanghai Hualei Enterprise Development Co., Ltd., said in an interview with the reporter of China Metallurgical News that as the market enters the off-season, it is expected that the supply of rebar will be affected by many factors or ushered in the turning point, and demand will decline. Maintain the "two highs and one low" situation.

From the perspective of supply, the current supply exceeds market expectations. The main reasons are: First, steel companies have large profits and high production enthusiasm. At present, among the five major varieties of steel, rebar has the best benefit, and major steel mills are basically full-load production. In addition to the current plate market profits, steel companies are more likely to tilt production capacity to rebar, which in turn increases rebar production. Second, the current price of industrial round bars and industrial wire rods is lower than the rebar price of 100 yuan / ton ~ 200 yuan / ton. Such steel enterprises turn their production capacity into rebar from the perspective of enterprise efficiency.

It is expected that the supply of rebar in the later period will enter an inflection point, which is mainly affected by factors such as environmental protection, limited production capacity, and national safety inspections.

From the demand point of view, although the current rebar market demand is also higher than expected, but with the late entry into the off-season, it is expected that demand will decrease. In the first five months of this year, demand for rebar was strong, mainly due to:

First, the real estate industry has more demand for rebar. In the first five months of this year, the growth rate of real estate investment, the growth rate of new construction of houses and the growth rate of construction area of buildings have all increased year-on-year.

Second, the speed of fabricated construction projects exceeded expectations. With the rapid development of the assembly-type construction industry, the development of downstream industrial buildings and facilities, housing, hotels, office buildings, railway construction and other industries will be promoted, and the demand for rebar will increase.

Third, the construction of infrastructure projects in various regions has increased. Many steel mills have increased the proportion of direct supply of steel to infrastructure projects around the country, and social stocks have not been high. In the case of higher steel mill production, total steel inventories, including rebar, continued to decline. According to the statistics of the Steel Association, in May this year, the social stocks of five major steel products in 20 cities nationwide continued to decline. Among them, wire rods and rebars have the largest declines, with a drop of more than 10%.

Overall, in the first five months of this year, the rebar market showed an operating trend of “two highs and one low” (high supply, high demand, low inventory). After entering June, the southern region entered the rainy season and the general high temperature weather throughout the country. The rebar market entered the low season of demand. It is expected that the total restocking volume of rebar will increase from the downside.

In addition, Liang Taigeng particularly reminded steel traders to pay attention to other factors affecting the trend of the rebar market, mainly in the following aspects:

The first is to pay attention to changes in supply and demand everywhere. At present, the rebar market price difference in major domestic regions is at the lowest level in history, and the inter-regional resource mobility is weakened. Whether the supply and demand balance will directly affect the rebar market price.

The second is to pay attention to the changes in the prices of steel raw materials. At present, the prices of iron ore, coking coal, coke and other raw materials remain high, and the average production cost of steel mills is increased by about 300 yuan/ton. It is expected that the support power of steel prices will become more and more obvious.

The third is to pay attention to the changes in Sino-US trade friction. Changes in Sino-US trade friction will directly affect the import and export of steel, and will also affect the supply and demand of the domestic steel market.

The fourth is to pay attention to the linkage effect of the current market. Changes in the rebar market in the futures market will also have an impact on the spot market rebar prices.