Background overview
After the holiday, there have been some significant changes in the rebar market. The large adjustment of blast furnace raw materials has led to the resumption of molten iron production exceeding expectations, and at the same time, the cost performance of molten iron and scrap has changed.
Steel mills adjust their strategies
Due to the change in price-performance ratio, some steel mills have begun to reduce the proportion of scrap used. This strategy adjustment may lead to an accelerated decline in scrap**.
Blast furnace raw material ** repair
The repair of blast furnace raw materials can be achieved through ***, but the current demand performance does not support this method. As a result, we have seen a similar passive expansion of blast furnace profits after the holiday, as well as a passive expansion of electric furnace profits in some regions.
Rebar market outlook
At this stage, the height of demand in the peak season of the rebar market is not clear. As such, we don't see the market aggressively moving towards further negative feedback**. This is also one of the reasons why it has recently been observed that the market ** has concentrated short position reduction between 3700-3750.
**Impact of the work report
The recently released ** work report did not show any parts that were particularly below or beyond expectations. However, various microscopic manifestations after the holiday are worth paying attention to. In addition to the continued strength of last year's strong industries such as white goods, automobiles, and machinery in the first quarter, the direct feedback from most downstream industries is not optimistic. In particular, the feedback from the building materials related industries on the capital side is even tighter than in previous years.
Conclusion
On the whole, it is still necessary to guard against the risk of adjustment in March. At present, there is no clear supply and demand gap in the raw material market to form an independent market, and the direction is determined by steel demand, and the strength of elasticity will be the key factor.
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