I. Price Action & Technicals (approx. 600 words)
As of the 2025-06-04 close, the SHFE.RB main continuous contract settled at 2,974.00 CNY/t, up 1.5710% from the previous trading day, the largest single-day gain in the past 5 trading sessions. Volume expanded significantly to 2,066,104 lots, an increase of roughly 33% from 1,553,663 lots on June 3, while open interest edged down from 2,297,854 lots to 2,280,389 lots. The combination of rising volume and falling open interest typically points to a short-covering-driven rebound rather than trend-following long positioning.
Looking at the 5-day sequence, the contract settled at 2,964.00 on May 28 (down 0.7700%), rebounded to 2,978.00 on May 29 (up 0.4723%), pulled back to 2,961.00 on May 30 (down 0.3366%), probed down to 2,928.00 on June 3 (down 1.1812%), and rallied strongly back to 2,974.00 on June 4. Price has been oscillating repeatedly within a narrow range of 2,912.00–2,978.00, with the June 4 close near the upper edge of that range.
On the moving-average system, MA5 stands at 2,961.00 and MA20 at 3,037.20. The close of 2,974.00 is about 13 points above MA5 but roughly 63 points below MA20. The short-term moving average is beginning to flatten, while the medium-term moving average remains downward-sloping, and the moving-average alignment has yet to repair into a bullish structure. The 20-day high H20 is 3,136.00 and the 20-day low L20 is 2,912.00; the current price sits in the lower third of that range, and the medium-term weak configuration is unchanged.
Pivot indicators show the daily pivot P at 2,962.33, first resistance R1 at 2,999.67, and first support S1 at 2,936.67. The close of 2,974.00 is above P and below R1, a neutral-to-firm state that is pivot-bullish but has not broken resistance. If subsequent sessions can break above R1 (2,999.67) on expanding volume, the upside targets would point to MA20 (3,037.20) and, beyond that, H20 (3,136.00); if price breaks below S1 (2,936.67), the short-term rebound structure would be damaged, with a possible retest of L20 (2,912.00).
Specific readings for oscillators such as RSI, MACD and ATR are pending updates, but judging from the relative position of price versus the moving averages, RSI is likely in the neutral-to-weak 40–55 zone, MACD remains below the zero line though the histogram may be converging, and ATR-implied volatility has risen somewhat after the June 4 volume expansion. On the weekly timeframe, price has run below MA20 for several consecutive weeks, and no clear reversal signal has emerged on the monthly timeframe either. Overall, the technical picture presents a “short-term rebound, medium-term pressure” configuration, with the key validation levels at R1 (2,999.67) and S1 (2,936.67).
II. Fundamental Drivers (approx. 700 words)
As the core domestic construction steel product, Rebar's fundamental drivers come mainly from the macro interest rate environment, the US dollar and inflation expectations, the inventory cycle, and changes on the property and infrastructure demand side. As of 2025-06-04, the quantitative data available for this report is concentrated in futures prices and positioning; specific readings for macro rates, the US dollar index, inflation data, inventories and ETFs are all pending updates, so the following is primarily a framework analysis and does not make numerical inferences.
On macro rates, Rebar prices are highly sensitive to the domestic credit impulse and property financing conditions. If domestic rates remain low or decline further, funding pressure on the property side eases at the margin, providing support to Rebar demand expectations; if the rate center shifts higher or credit extension falls short of expectations, construction steel demand comes under pressure. The current market pits easing policy expectations against the reality of weak property investment, and this tension is directly reflected in the range-bound oscillation of the RB main contract.
On the US dollar and inflation dimension, Rebar is denominated in RMB, and US dollar index moves transmit mainly through the import cost of raw materials such as Iron Ore. If the dollar weakens, Iron Ore import costs rise, providing cost support to Rebar; if the dollar strengthens, the raw material side comes under pressure and cost support weakens. On inflation expectations, if the domestic PPI year-on-year decline narrows, the center of industrial product prices is likely to lift, which is bullish for Rebar; otherwise it is bearish. The relevant specific data is pending updates.
The inventory cycle is the most direct variable in Rebar fundamentals. If social inventories and mill inventories destock in tandem, it indicates smooth absorption by end demand and prices tend to rise rather than fall; if inventories accumulate, it indicates loose supply-demand and prices come under pressure. Current data is pending updates, but judging from the June 4 tape of rising volume and rising price, the market may be trading some expectation of inventory destocking or demand improvement, which requires subsequent data verification.
On ETFs and flows, domestic commodity ETFs have limited direct allocation to Rebar, influencing it more through overall fund flows into the ferrous complex. If sector funds see net inflows, RB gains sentiment and liquidity support; if net outflows, rebounds lack follow-through. On geopolitical factors, Rebar's degree of internationalization is lower than that of crude oil and precious metals, and geopolitical shocks transmit indirectly mainly through ocean freight rates, Iron Ore trade flows and macro risk appetite. If geopolitical tensions escalate and push ocean freight rates higher, raw material costs rise, providing weak support to Rebar; if geopolitics ease, the cost side is neutral-to-bearish.
In summary, Rebar fundamentals are currently in a phase of “warm macro expectations, real demand yet to be verified.” The June 4 rebound was driven more by tape sentiment and short covering, and the sustainability of fundamental drivers still requires further confirmation from inventory, credit and property data. In the absence of data, it is inadvisable to extrapolate the fundamental direction excessively.
III. Positioning & Fund Flows (approx. 400 words)
On open interest, the SHFE.RB main continuous contract's open interest declined steadily from 2,441,388 lots on May 28 to 2,280,389 lots on June 4, a cumulative decrease of about 161,000 lots over 5 trading sessions, or roughly 6.6%. The continued decline in open interest indicates that some capital is exiting and market participation is falling, which typically occurs in range-bound markets with unclear trends. On June 4 alone, open interest fell 17,465 lots from the prior day while price surged 1.5710%; the combination of rising volume and falling open interest further confirms the dominance of short covering.
COT classified positioning data (commercial positions, non-commercial positions, retail positions) is pending updates, so the crowding of longs and shorts cannot be judged. However, inferring from the downtrend in total open interest, both longs and shorts lack firm conviction to hold, and the market is in a state of position-reducing观望. If open interest subsequently rebuilds alongside rising prices, it would indicate long capital re-engaging and stronger rebound sustainability; if open interest continues to fall while prices rebound, the rebound may have limited strength.
Options and volatility data is pending updates. Inferring from the futures tape, June 4 volume expanded to 2,066,104 lots, the highest in the past 5 days, and implied volatility may have risen somewhat. If volatility continues to rise, the options side may attract more directional and volatility strategies, in turn affecting the futures positioning structure. Current fund flows overall show a “short-term trading dominant, trend capital absent” character, and subsequent changes in open interest should be watched to judge whether capital is returning.
IV. Cross-Asset Relative Value (approx. 400 words)
On cross-asset relative value, Rebar's linkage with macro ratios such as the gold-silver ratio, oil-gold ratio and copper-gold ratio is realized mainly through the switching between “industrial commodity attributes” and “safe-haven attributes.” As a typical industrial commodity, Rebar has high directional correlation with industrial commodities such as copper and oil, and shows a phase-dependent negative correlation with gold's safe-haven attribute.
Specific values and historical percentile data for the gold-silver ratio, oil-gold ratio and copper-gold ratio are pending updates, so precise ratio levels and percentile judgments cannot be given. From a framework perspective, if the copper-gold ratio is at a historical low, it indicates the market is pessimistic about industrial demand expectations, and Rebar as a ferrous industrial commodity may come under synchronized pressure; if the copper-gold ratio recovers from lows, it indicates improving industrial demand expectations, transmitting positively to Rebar. On the oil-gold ratio, if crude oil strengthens relative to gold, inflation expectations heat up, which is bullish for industrial commodities such as Rebar; otherwise it is bearish.
The Rebar-to-Iron Ore ratio (Rebar/Ore ratio) is the most important ratio relationship within the ferrous complex. If the Rebar/Ore ratio is low, mill margins come under pressure, which may trigger production cuts and in turn support Rebar prices; if the Rebar/Ore ratio is high, mill margins are fat, output is released, and supply pressure on Rebar rises. The current specific Rebar/Ore ratio is pending updates, but judging from the June 4 tape of RB rebounding independently, the finished steel side may be stronger than the raw material side, and the Rebar/Ore ratio may have repaired somewhat.
The core conclusion on cross-asset relative value is: Rebar's directional drivers come more from domestic demand and policy than from direct transmission of global macro ratios. In the absence of ratio data, it is recommended to use intra-ferrous ratios (Rebar/Ore ratio, HRC-Rebar spread) as the primary tracking indicators, with cross-asset ratios as auxiliary reference.
V. Sentiment (approx. 200 words)
On sentiment, domestic steel-related headline data over the past 48h is N/A, so the market sentiment score and headline bias cannot be quantified. Inferring indirectly from tape characteristics, the June 4 volume-backed gain of 1.5710% indicates short-term sentiment has warmed somewhat, with short covering and long probing coexisting, but the decline in open interest suggests the sustainability of the sentiment improvement is questionable.
If positive headlines on steel industry policy, property data or inventory changes emerge subsequently, the sentiment score could recover further and catalyze the rebound; if negative headlines on weakening demand or inventory accumulation emerge, sentiment could turn weak again. In the absence of sentiment data, it is recommended to use tape volume-price and positioning changes as proxy variables for sentiment, and to avoid directional judgments based on a single headline.
VI. Historical Statistical Patterns (approx. 300 words)
In terms of historical statistical patterns, Rebar exhibits certain seasonal characteristics. Generally speaking, the period from late Q2 to early Q3 marks the transition from the traditional peak season for construction steel to the off-season, with June often falling within a window of “peak season winding down, off-season not yet arrived,” where price direction depends on inventory depletion pace and policy expectations. The performance data for Rebar prices during the same period (early June) over the past 10 years is pending update, and precise up/down probabilities and averages cannot be provided.
From a seasonal framework perspective, if June inventory depletion proceeds smoothly, prices are prone to a phased rebound; if inventories accumulate or demand weakens, prices come under pressure. The current rebound on June 4 is consistent with the direction of the seasonal window, but out-of-sample extrapolation from historical statistics requires caution. It is recommended to conduct quantitative validation of seasonal patterns once the past 10 years of same-period data are obtained. In the absence of data, this section is primarily framework-based description, without numerical inference.
VII. Long-Short Game Deduction (approx. 400 words)
Bullish logic (no fewer than 4 points):
1. On June 4, the close at 2974.00 rose 1.5710% on increased volume; rising volume with rising price suggests relatively strong short-term momentum;
2. The closing price stood above MA5 (2961.00) and the pivot P (2962.33), indicating short-term structural improvement;
3. Prices rebounded from L20 (2912.00) without making a new low, with bottom support initially emerging;
4. Declining open interest accompanied by rising prices suggests short covering may not yet be over, with momentum for a further push toward R1 (2999.67).
Bearish logic (no fewer than 4 points):
1. The close at 2974.00 remains approximately 63 points below MA20 (3037.20), with clear medium-term moving average suppression;
2. The 20-day high H20 (3136.00) is significantly distant from the current price, and the medium-term downtrend remains unchanged;
3. Open interest has declined for 5 consecutive days, trend-following capital is absent, and the rebound lacks incremental capital support;
4. Fundamental inventory, demand, and credit data are pending update; fundamental validation of the rebound is insufficient, and if data fall short of expectations, the rebound may fizzle out.
Short- to medium-term balance of power: In the short term (1–5 days), bulls hold a slight advantage, with prices above MA5 and P; a breakout above R1 (2999.67) would strengthen bullish momentum. In the medium term (1–4 weeks), bears remain dominant, with MA20 (3037.20) sloping downward; prices need to effectively reclaim MA20 to reverse the medium-term setup. The market is currently in a “short-term rebound, medium-term pressure” game window, with direction dependent on whether R1 or S1 is breached.
VIII. Trading Strategies & Risk Management (approx. 300 words)
Strategy One (short-term long): If prices pull back to and stabilize near S1 (2936.67), a light long position may be attempted, with entry reference in the 2936–2950 range, stop-loss set below 2912.00 (L20), targets at R1 (2999.67) and MA20 (3037.20), time horizon 1–5 trading days, position size recommended not to exceed 15% of total capital, conviction 6.
Strategy Two (sell the rebound): If prices rally to R1 (2999.67) and face resistance with shrinking volume, a light short position may be attempted, with entry reference in the 2995–3010 range, stop-loss set above 3037.20 (MA20), targets at 2962.33 (P) and 2936.67 (S1), time horizon 1–5 trading days, position size recommended not to exceed 15% of total capital, conviction 5.
On risk management, the current market is in a range-bound regime with declining open interest and limited trend opportunities; range strategies are recommended, with strict stop-losses and avoidance of chasing rallies or selling dips. If prices effectively break above R1 (2999.67) and hold, short strategies should be exited promptly; if prices break below S1 (2936.67), long strategies should be stopped out promptly. In terms of position management, single-trade risk exposure is recommended to be kept within 2% of total capital.
IX. This Week's Data Calendar (approx. 100 words)
The domestic financial calendar for the next 7 days is pending update. Attention is recommended to the following potential event windows: weekly domestic steel social inventory data, steel mill blast furnace operating rates, monthly real estate sales and investment data, domestic credit and aggregate financing data, and capital flows in the ferrous complex. If the above data are released, they will serve as catalysts for Rebar's short-term direction. Specific dates and figures are pending update; please refer to official releases.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.