Impact of the New National Standard on the Rebar Market from Three Aspects 🔩

1. The New Standard Still Constrains the Output of Rebar 🏗️

The new national standards for rebar, namely the steel bar standards GB1499.1-2024 "Steel for Reinforced Concrete Part 1: Hot-rolled Plain Round Steel Bars" and GB1499.2-2024 "Steel for Reinforced Concrete Part 2: Hot-rolled Ribbed Steel Bars" were released on June 25, 2024, and will be implemented on September 25, 2024, with a buffer period of about 3 months. However, compared with the last adjustment of the steel bar standard (in 2018) with a buffer period of 9 months, the buffer period for this adjustment has been greatly shortened and is a mandatory national standard.

2. The New Standard Still Poses a Hidden Danger to the Spot Market 📉

Recently, we have observed that some warehouses in the eastern region are under great pressure. At the same time, against the backdrop of the poor performance of rigid demand and the obstruction of warehouse shipments, the new national standard, as a hot event, has rushed into the market, intensifying panic and leading to a stampede of shipments. In addition, the market is also rumored that trading companies are quickly selling and no longer accepting old national standard resources. Although these rumors are not reliable, they also reflect the market's concern that the new national standard will cause the old national standard resources to lose their circulation attributes after landing.

3. The Impact of the New Standard on the Futures Market Has Already Appeared 📈

Although the exchange has not yet announced that the old national standard rebar cannot be used to make warehouse receipts for delivery, the trend of the expansion of the monthly price difference (September-October contract price difference) of rebar shows that the market is betting on the expectation that the old national standard cannot be delivered on the October contract. If the exchange later issues an announcement that not only the old national standard rebar cannot be used to make warehouse receipts for delivery, but also the old national standard that has been made into warehouse receipts cannot be transferred for delivery after the October contract, this will be more conducive to the convergence of the price difference between September and October, as this will ensure that there is goods available for delivery on the October contract, thereby weakening the expectation of a short squeeze.