Scrap prices expected to rebound in short term, long-term market still uncertain

This week, China's steel mills continued production cuts, leading to lower rebar output and inventory depletion. While the supply-demand balance is gradually improving, high inventories of steel billets and flat-rolled products persist, creating pressure on operations. The market, after a period of decline, experienced a rebound, which improved sentiment and stabilized scrap steel prices after declining.

The ferrous metal market's rebound drove a rise in both finished steel and scrap prices, boosting market confidence. This improvement was led by the stabilization of rebar prices, which, following previous production cuts, saw a release of pent-up demand. The approaching cooler weather is also expected to support further demand. However, despite these positive signs, the market's fundamental issues remain unresolved overall; while there may be a short-term rise in scrap prices, the long-term development is still uncertain.