The futures of steel rebar continue to rebound, can the rise in steel prices continue?

After entering July, the price of steel rebar futures continued to fall. It fell by 789 yuan/ton in half a month, falling to 3589 points, which is the lowest point of the year so far. After the snail “bottomed out”, the rebound accelerated, and the spot price also rose.
Under the high cost and low demand, steel mills in many places across the country began to reduce production spontaneously, and the scope and extent of production reduction continued to increase. The blast furnace operating rate has also dropped again and again, and is now far below the level of the same period last year. On July 22nd, the blast furnace operating rate of major steel companies in the country was 76.1%, down 1.4 percentage points from last week and down 4.3% from the same period last year. At present, the blast furnace operating rate of major steel companies in the country has experienced a “six consecutive declines”, a cumulative decrease 6.3 percentage points. This shows that steel production is in a state of continued contraction.
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As the blast furnace operating rate continued to decline, steel production dropped significantly. Under the continuous reduction of supply, social inventory has also changed from the “off-season” accumulation of inventory in July, and there has been a “five consecutive declines”, and the speed of inventory reduction has continued to accelerate. Under the continuous decline of production and inventory, the supply side began to tighten continuously, and the relationship between supply and demand in the market has been eased to a certain extent.
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Recently, the domestic epidemic situation has improved significantly, and with the implementation of “stabilizing the economy” policies in various places, market demand has shown a certain improvement. This also means that the project construction in the later stage has a certain guarantee in terms of funds and construction progress, which will benefit the steel demand in the later stage. However, it is still in the off-season of seasonal demand with high temperature and rain, so the overall steel demand has not been fully released, and it is necessary to further observe the continuity of demand and the overall release in the later stage.
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