This week witnessed a notable rebound in the steel market following a period of consolidation, with both futures and spot prices registering significant gains driven by a combination of policy catalysts, cost support, and technical breakthroughs. However, the underlying "weak supply-demand" fundamentals remain unchanged, casting uncertainties over the sustainability of the upward momentum.

Futures markets led the rally this week. As of the close on November 17, the main rebar contract (RB01) surged 50 points to 3,097 yuan/ton, marking a 1.64% increase; the hot-rolled coil contract (HC01) rose 51 points to 3,302 yuan/ton, up 1.57%. Notably, the rebar contract saw an unusual reduction of 110,000 lots in open interest, with short positions decreasing by 65,000 lots as bears covered positions amid bullish sentiment. On the raw material side, the iron ore contract (I01) climbed 14 points to 788.5 yuan/ton, while coke (J01) advanced 29.5 points to 1,710 yuan/ton, reflecting strong cost-side support.

Spot prices followed suit. The average spot price of rebar nationwide reached 3,238 yuan/ton, up 29 yuan from the previous trading day, with some regions seeing gains of 40-50 yuan. Hot-rolled coil averaged 3,296 yuan/ton, an increase of 21 yuan. Steel billets in Qian'an, Tangshan, rose twice within a day, totaling 20 yuan to 2,970 yuan/ton. Major steel mills also adjusted prices upward: Maanshan Iron & Steel and Guixin Steel hiked rebar and wire rod prices by 50 yuan/ton, while Shandong Iron & Steel and Yongfeng Steel increased by 20 yuan/ton.

The rebound was fueled by multiple positive factors. Firstly, policy signals boosted market sentiment. The Ministry of Ecology and Environment launched the 5th batch of central environmental protection inspections, potentially curbing steel production in some regions. Meanwhile, the State Council meeting discussed accelerating "two key" construction projects (major projects and key areas), raising expectations for infrastructure-driven steel demand. The People's Bank of China further injected liquidity through an 800 billion yuan 6-month buyout repo, improving market liquidity conditions.

Secondly, cost support remained robust. Coking coal and coke prices stayed firm, with Tangshan's quasi-first-grade metallurgical coke rising 50 yuan to 1,590 yuan/ton. Although iron ore supply is expected to loosen due to increased shipments from Australia and Brazil, the current port inventory levels and高炉复产 demand kept prices at a high level of around 788.5 yuan/ton.

Technically, the market broke out of an 8-day consolidation range, triggering algorithmic trading and short-covering activities, which amplified the price surge.

Despite the rally, fundamental headwinds persist. On the supply side, crude steel output remains elevated: key steel enterprises produced 2.0546 million tons of crude steel daily in October, a 1.9% month-on-month increase, adding pressure to the market. On the demand side, the arrival of winter and寒潮 weather (with central and eastern regions seeing temperature drops of 6-16℃) has restricted construction activities, leading to a seasonal decline in construction steel demand. The "weak supply and weak demand" pattern has not been fundamentally reversed.

Iron ore fundamentals also show signs of weakening. Global iron ore shipments reached 35.164 million tons last week, a sequential increase of 4.474 million tons, and domestic iron element inventories continue to accumulate, suggesting limited upside for ore prices in the medium term.

Looking ahead, the steel market is likely to maintain a "range-bound oscillation" pattern. The current rebound is viewed as a technical correction amid the off-season and steel enterprises' profit pressure rather than a trend reversal. Traders are advised to take this opportunity to reduce inventories and adopt a "fast in and fast out" strategy instead of blindly chasing gains. Downstream users can consider phased restocking during price pullbacks.

The key turning point for the market will depend on the实质性 implementation of macroeconomic stimulus policies and the improvement of next year's demand expectations, particularly the signals from the upcoming Central Economic Work Conference in December. For the near term, the rebar futures market will focus on whether it can effectively break through the 3,100 yuan/ton resistance level, with the next trading range expected to be 3,041-3,120 yuan/ton.