Why are rebar futures prices higher than HRC futures prices?
1. As of the end of last week, the operating rate of domestic electric furnace steelmaking plants mainly producing rebar and other construction steel was less than 25% due to losses, resulting in a relative reduction in the supply of rebar.
2. In the first half of the year, China's domestic blast furnace steelmaking plants also shifted their production capacity to industrial steel such as HRC, resulting in a serious backlog of HRC inventory.
3. The price of hot coil in the international market has dropped sharply, and the price of domestic hot coil has lost its competitive advantage, resulting in a substantial decrease in exports.
This week, some types of rebar in the steel market in some cities are out of stock or in short supply, and it is not surprising that rebar futures and spot prices are firm. Although the price of steel has fallen sharply, the law of supply and demand in the market economy has always been at work.