In December 2024, the domestic construction steel (rebar) prices will mainly fluctuate, with limited upward and downward space. Entering January 2025, considering that the fundamentals of construction steel may continue to be weak in both supply and demand, the price will continue to fluctuate, with limited upward and downward fluctuations.

Against the backdrop of both weak supply and demand, domestic rebar prices fluctuated at a high level in the middle and late December. Specifically, on the one hand, both domestic production and inventory of rebar are at low levels, and the situation of incomplete specifications of various resources in the market is quite common. There is no obvious pressure on the supply side, which provides support for prices.

According to the monitoring of C1 Energy, the domestic production of construction steel in December 2024 decreased by 1.7251 million tons compared with the same period of the previous month, a decline of 9.73%. Among them, the output of rebar from 134 production enterprises monitored by C1 Energy was 9.459 million tons, a decrease of 138.62 tons compared with the same period of the previous month. The output of wire rods and coil bars was 6.5477 million tons, a decrease of 338,900 tons compared with the same period last month. The main reason for the reduction in production is that in December 2024, the profits of construction steel enterprises were squeezed, their production enthusiasm weakened, and the situations of production cuts and production transformation increased, resulting in a reduction in the output of construction steel.

On the other hand, the temperature in the north dropped that month, while the demand in the south was mainly for basic needs. Overall demand shrank, which somewhat dragged down prices.

Data shows that in December 2024, the demand for construction steel was 26.996 million tons, a decrease of 5.56% compared with the previous month. Due to weather conditions in the north and financial constraints in the south, the overall construction progress of construction sites has slowed down significantly. The steel consumption has continued to decline seasonally, and the demand data has continued to decline. Moreover, the overall decline rate may further expand compared to November.

However, in terms of inventory, as of December 26, 2024, the social inventory of construction steel continued to decline, with an overall decrease of 12.28 percentage points compared to the previous month. Currently, the inventory is far lower than that of the same period last year.

In addition, the futures of rebar have been fluctuating and adjusting weakly, and the market sentiment is relatively cautious. Under the game of bulls and bears, the upward and downward range of the price of rebar is relatively limited, and it mainly fluctuates.

Looking ahead to the construction steel market in January 2025, from the supply side, the steel mills are scheduled to resume production in January 2025, and the delivery volume in the spot market may increase. However, the reduction in production due to maintenance by manufacturing enterprises has increased, and the electric arc furnaces are gradually entering the shutdown stage, which may lead to a decline in output. From the demand side, the temperature will continue to drop in January 2025, and the downstream construction will basically be completed, resulting in relatively low demand. Against this backdrop, it is expected that the overall social inventory of construction steel may increase slightly in January 2025. However, it should also be noted that although the construction steel market has entered the stage of winter storage and accumulation, due to the low inventory in the early stage, under the expected decline in production, the increase in inventory may be lower than the level of previous years.

In addition, from the perspective of cost, the raw materials are stable with a slight weakening trend. There is a possibility that the price of coke may decline, and the cost may drop slightly.

Overall analysis shows that against the backdrop of declining costs, low profits and enterprise inventories, and limited production increments, the market for construction steel has a strong willingness of purchasers to hold prices, but traders' enthusiasm for winter storage is average and their operational willingness is not high. Without the influence of other market news, it is expected that the price will mainly fluctuate and consolidate, with limited ranges of rise and fall. It is expected that in January 2025, the lower support level for construction steel will be 3,330 yuan per ton and the upper pressure level will be 3,450 yuan per ton.