The closing price of the rebar contract rose to 3,656 yuan/ton (505 USD), up by 206 yuan/ton (28 USD) by the end of April.
However, there is a possibility of a gradual decrease in rebar prices in May. The period between May and June is generally a time when steel demand is low. During this period, regions like East China, South China, and others experience the effects of the rainy season, which hinders an increase in demand. From mid to late April, the monthly increase rate in rebar consumption started to slow down, with even an annual decrease of about 12.5%.
The profits of steel companies have also significantly decreased. It should be noted that since the end of April, raw material prices have significantly increased, leading to a considerable narrowing of steel companies' profits. If steel companies' profits turn negative, there is a relatively high probability of the average daily hot metal production gradually peaking.
While the average daily hot metal production reaching its peak would lead to a weakening of real demand for raw materials and renewal demand for steel companies, iron ore supply is also steadily recovering. This situation could trigger negative feedback in the industry chain.
However, the policy strength at the end of April exceeded market expectations slightly, with further reinforcement of the real estate support policy and expectations for increased fiscal and monetary policies in the second half of the year. Therefore, the upward trend in rebar prices has not changed.
As a result, while rebar prices in China increased in April, there is a possibility of a gradual decline in May. The change in prices will be influenced by various factors such as demand, supply, raw material prices, and government policies.
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