On Thursday, the 10 contract fluctuated weakly, closing at 3,121, down 0.03%, with a reduction of 65,285 lots. This week, the output of rebar slightly decreased, while inventory continued to rise, but the rate of inventory accumulation slowed down, and the apparent demand rebounded compared to the previous period. In terms of the industry, the output of pig iron from steel mills remained at a high level, and the output of rebar fluctuated narrowly, remaining higher than the same period last year. The downstream demand weakened significantly due to seasonal factors such as high temperatures and rainfall. The rate of inventory accumulation increased somewhat.

Additionally, the rise in costs led to a slight narrowing of steel mills' profits. Currently, the steel market is characterized by stable supply and weak demand. The continued decline in domestic real estate and infrastructure investment in July has put pressure on steel demand. However, steel enterprises in Tangshan will soon implement production restrictions, which is expected to reduce steel supply. The short-term supply and demand fundamentals may improve, and it is expected that steel prices will find support at the current low levels. In terms of operation, pay attention to the support level of 3,150 for the 2601 contract.

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