English
English French German Portuguese Spanish Russian Japanese Korean Arabic Irish Greek Turkish Italian Danish Romanian Indonesian Czech Afrikaans Swedish Polish Basque Catalan Esperanto Hindi Lao Albanian Amharic Armenian Azerbaijani Belarusian Bengali Bosnian Bulgarian Cebuano Chichewa Corsican Croatian Dutch Estonian Filipino Finnish Frisian Galician Georgian Gujarati Haitian Hausa Hawaiian Hebrew Hmong Hungarian Icelandic Igbo Javanese Kannada Kazakh Khmer Kurdish Kyrgyz Latin Latvian Lithuanian Luxembou.. Macedonian Malagasy Malay Malayalam Maltese Maori Marathi Mongolian Burmese Nepali Norwegian Pashto Persian Punjabi Serbian Sesotho Sinhala Slovak Slovenian Somali Samoan Scots Gaelic Shona Sindhi Sundanese Swahili Tajik Tamil Telugu Thai Ukrainian Urdu Uzbek Vietnamese Welsh Xhosa Yiddish Yoruba Zulu Kinyarwanda Tatar Oriya Turkmen Uyghur

Leave Your Message

Rebar demand at record lows?

2024-07-17 13:21:14

Into July, under the influence of the off-season effect, China's steel market rebar steel consumption strength is not high, and the improvement momentum is not strong. The author believes that rebar demand will see a new low at the end of July - early August and the new low value may reach 2.25 million tonnes per week.


Rebar consumption has the possibility of record low

From the current market point of view, in July and August, in addition to seasonal factors, in the downstream of the number of new construction projects is not enough, the enterprise funds in place is not obvious under the influence of the expected improvement in the situation, rebar consumption to turn the momentum is not obvious.

rebar
In June, a total of 1,686 projects (mainly in the infrastructure and municipal categories) were started across the country, a 27.9 per cent increase from the previous month. However, in reality, the improvement in the number of new projects started in June was not very strong, and the main reason for the larger year-on-year increase in June was the fact that the number of new projects started in May fell to a low level.
In my opinion, into July and August, the number of downstream new construction projects to improve is not strong, the reasons are mainly two aspects.

On the one hand, the impact of seasonal factors is obvious. From the past three years, the trend of the number of new construction projects, in general, the first quarter of each year is the stage of the new project focus; into the second quarter, the number of new construction projects gradually fall back; in June to August, the three months, the number of new construction projects overall less.

On the other hand, the semi-annual payback of construction units is less than expected. Centennial construction network research data show that the current site funds in place rate fell for three consecutive weeks, the latest issue of the value of 61.08%. In general, when the funds in place rate of 80% or more, the intensity of the project start is considered high, the current level of funds in place is difficult to promote the site hot start. Downstream construction units generally reflect the recent slower pace of funds in place, in the semi-annual payback junction of the degree of payback is not as good as last year.

The reason for this is that the key lies in the greater pressure of local debt repayment this year, which in turn leads to a slower pace of special debt issuance. Since the beginning of this year, the overall net financing of special bonds is lower than the same period in the past two years. In addition, due to the special debt net financing amount and new special debt issuance amount trend is almost the same, in July the new special debt plan issuance volume is low under the expectation (July is expected to issue new special debt 322.2 billion yuan, lower than the actual issuance amount in June), the special debt net financing amount probability is also low. Therefore, in July and August, in the downstream infrastructure projects to improve the momentum of funding is not enough and the number of new projects is limited under the expectations of the rebar consumption is still there may be weaker.

In addition, the property market is also affected by seasonal factors. The data of the past three years show that the data of new housing construction in July showed a downtrend compared with June, and it is expected that the real estate market will still drag down the release of rebar demand in the short term. From a comprehensive point of view, July, August, rebar consumption performance or still relatively weak.

Rebar supply pressure still exists

At present, many long-process and short-process steel mills rebar profits show a contraction trend, and the current iron production probability of the top, is expected to gradually fall back later. The author believes that the short-term rebar production will decline. To be released after the supply pressure, rebar production is expected to rebound.

According to the changes in rebar supply and demand projections, rebar inventory may continue to grow slightly in July - early August. Although from the supply side, rebar production is reduced compared with previous years, but combined with the future trend of weak demand, the overall supply side of rebar is still under some pressure.

From a comprehensive point of view, in July and August, there is marginal pressure on the fundamentals of the rebar market, and rebar prices are under downward pressure. However, according to past experience, after entering the off-season of demand, the influence weight of market fundamentals fluctuations on steel price trends will be reduced, and macro-expectations will become the main driving factor affecting the direction of steel price fluctuations. During this period, market participants should focus on the macro factors on the aftermarket market disturbances.