The domestic stock market rebounded strongly, and dual coke futures continued to rise, but steel inventories continued to accumulate. Threaded steel futures hit a two month low, falling 3082 yuan/ton, and hot coils also closed slightly lower.

The decline in PPI narrowed in August, and the sentiment of industrial products improved slightly. However, the PMI data of China's manufacturing industry in August was still below the boom bust line of 50, indicating that the recovery speed of the manufacturing industry is still relatively slow. The business activity index of the construction industry fell by 1.5 percentage points compared to the previous month. Even though Shanghai optimized and adjusted its real estate policy measures on August 25th, and Shenzhen's 8 districts further relaxed their housing purchase restrictions from September 6th, the substantial boost to the demand for rebar is limited. According to the real estate data in July, the decline in investment and construction in the real estate market will continue to curb the terminal demand for construction steel. Therefore, overall, the short-term recovery of terminal demand is relatively strong, but the wait-and-see attitude towards downstream procurement of threads is still strong. This week, the funding availability rate of construction sites contracted, decreasing by 0.16 percentage points month on month to 59.24%, a decrease of 3.07 percentage points compared to the same period last year. Among them, the funding rate for non construction projects increased to 61.03%, the highest since this year's Spring Festival, while the funding rate for construction projects decreased by 0.64% to 50.75%.

From the inventory situation, the inventory of major steel varieties increased by 0.93% for the seventh consecutive week to 15.1461 million tons on Friday, reaching a new high in over four months. The total production decreased by 34100 tons, and the apparent demand increased by 155000 tons compared to last week. Specifically, the inventory of thread society increased by nearly 4%, total inventory increased by 2.17%, while production decreased by 3.09% and apparent demand decreased by nearly 2%; The demand for medium and thick plates decreased by 4.5% month on month, inventory increased by 1.09%, and production decreased by 3.73%; Relatively speaking, the production of hot coils increased by 3.47% month on month, while inventory slightly decreased and apparent demand increased by 6.84%; Cold rolled watches need to increase by more than 5%, resulting in a decrease in production compared to the previous period.

Overall, short-term demand is recovering, but medium - to long-term market expectations remain cautious. The characteristics of the peak season are not obvious, and the apparent demand for threads has decreased significantly this week. Zhengxin Futures commentary suggests that Chengcai should adopt a unilateral wait-and-see approach and pay attention to opportunities to short the snail mine ratio.

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