I. Bottom Line & Directional Bias
The current directional call for Rebar (RB2701) is bearish. The core driving logic is as follows: First, the main contract fell on an open interest build, with clear signs of active short positioning; the notional main-contract open interest changed by +CNY 924m on the day, indicating that shorts are taking the initiative rather than longs exiting passively. Second, price broke below the 20-day channel lower bound of 3,060 and sits at the 24.4% percentile of the 20-day channel, showing clear technical pressure and opening up short-term downside. Third, on the fundamentals side, inventory pressure and weak demand are resonating, compounded by bearish macro data expectations, further weighing on prices.
Invalidation condition: If the daily close holds firmly above 3103.33 (R1), or the night session effectively breaks above 3110, the bearish thesis is invalidated and the stance shifts to neutral, on the sidelines.
II. Price Action & Technical Analysis
As of the 2026-10-13 settlement, Rebar (RB2701) closed at 3,089, with a settlement price of 3,085, down 0.19% versus the prior settlement. The 5-day change is -0.52% and the 20-day change is -2.03%. ATR14 is 28.5 (0.92%, full intraday range), RV20 is 10.1%. The 20-day channel spans 3,060–3,179; the current price is near the lower bound of the channel, at the 24.4% position. Pivots: P 3091.67, R1 3103.33, S1 3078.33 (classic pivots derived from the H/L/C of 2026-10-12, corresponding to the 2026-10-13 trading day).
The night session review shows that from 10-13 21:05 to 10-13 23:00, the Rebar night session opened at 3,090, high 3,090, low 3,073, and closed at 3,078, down 0.36% versus the day session close and down 0.23% versus settlement. The night session extended the day session's decline, with short pressure continuing to be released. On the weekly chart, the last completed weekly bar (2026-10-08 to 2026-10-09) closed at 3,080, with a weekly change of -1.03%. This week (starting 2026-10-12, 2 trading days) is not yet complete and is tentatively marked at 3,089 (+0.29%), but the weekly conclusion references only the completed week, i.e., the 3,080 close was a down week.
Technically, price has broken below the 20-day channel lower bound of 3,060 and sits at the 24.4% percentile, implying heavy short-term downside pressure. Pivot R1 3103.33 is the key resistance; if it cannot be held, a further probe toward S1 3078.33 is likely. ATR14 of 28.5 indicates moderate volatility, but the night session decline of 0.36% points to active short open interest build, leaving the technicals bearish.
III. Supply-Demand Balance & Fundamental Drivers
On the supply-demand balance, Rebar inventory pressure persists. According to seasonal data, the average move over the 20 trading days from the same date in the past 15 years is +0.02%, the median is -1.18%, with gains in 6 of 15 years. The best was 2016 at +30.3%, the worst was 2021 at -18.7%. The market is currently in a seasonally weak zone, and inventory pressure may be further amplified.
On macro transmission, China CPI y/y is expected at 1.0% on 10-14 09:30, prior 0.8%, with a surprise threshold of ±0.2%; PPI y/y is expected at 4.4%, prior 3.8%, with a surprise threshold of ±0.6%. If CPI and PPI data surprise, it could trigger concerns over weak demand and further weigh on black-series prices. In addition, the trade balance is expected at 790B on 10-14 10:03, prior 809B; if trade data weakens, it will affect export-oriented demand and indirectly suppress Rebar demand.
On processing margins, the Rebar paper gross spread (RB − 1.6×I − 0.5×J) does not deduct processing/alloy/labor/financial costs and can only be described by historical percentile. The current paper gross spread is at a historical low, indicating that steel mill margins are under pressure, which may affect production incentives, though near-term inventory pressure still dominates. On the basis, the spot basis is not listed, but the night session decline of 0.36% suggests that futures discounts may deepen, further weighing on spot prices.
IV. Positioning & Fund Flows
Top-20 seat positioning shows Rebar main contract net long of 37,436 lots (daily change -9,236 lots). The net direction is net long, but the daily reduction of 9,236 lots indicates longs cutting positions and shorts adding. Main-contract notional open interest is CNY 52.85bn, with a daily change of +CNY 924m, open interest +29,904 lots, and a price change of -0.19%. The rise on an open interest build (active shorts) indicates that shorts are taking the initiative rather than longs exiting passively.
On COT weekly change versus price divergence, prices are falling while open interest is rising, indicating active short positioning rather than long liquidation. On implied versus realized volatility, ATR14 of 28.5 (0.92%) shows moderate realized volatility, but the night session decline of 0.36% suggests bearish market sentiment and implied volatility may rise.
On fund flows, the main-contract notional open interest daily change of +CNY 924m shows funds flowing toward shorts. The top-20 seats are net long 37,436 lots, but down 9,236 lots on the day, indicating longs cutting and shorts adding. This shift in positioning structure further confirms the bearish bias.
V. Cross-Asset Relative Value & International vs China Markets
On cross-asset relative value, the gold/silver ratio is 70.18 (1Y percentile 82.54%, 3Y percentile 27.51%), the copper/gold ratio is 1.61 (1Y percentile 99.6%, 3Y percentile 61.64%), and the oil/gold ratio is 0.0225 (1Y percentile 95.24%, 3Y percentile 50.53%). The gold/silver ratio is at a high 1Y percentile, showing gold relatively strong versus silver; the copper/gold ratio is at an extremely high 1Y percentile, showing copper relatively strong versus gold and strong growth expectations; the oil/gold ratio is at a high 1Y percentile, showing crude oil relatively strong versus gold.
On international versus China market valuation, as Rebar is a China product, the international-to-China premium is not listed, but the night session decline of 0.36% suggests China futures may be relatively weak versus international markets. The dollar index DXY is 102.22 (-0.36%), and the US 10-year Treasury yield is 5.217 (-0.44%); a weaker dollar may support commodity prices, but Rebar is more affected by China supply-demand, with limited international market impact.
Cross-asset relative value shows that both the copper/gold and oil/gold ratios are at high percentiles, indicating industrial metals and energy are relatively strong versus gold, but as a black-series product, Rebar is more affected by China supply-demand and macro data, with limited impact from international cross-asset valuation. The current bearish thesis is mainly based on China supply-demand and positioning structure, with cross-asset relative value serving only as an auxiliary reference.
VI. Historical Statistics & Seasonality
Based on historical statistics over the 20 trading days from the same date in the past 15 years, Rebar's seasonal performance since mid-October shows clear divergence. The sample shows an average gain of +0.02% for this period, but a median decline of -1.18%, indicating that most years trend lower. Of the 15 sample years, only 6 recorded gains, a win rate below 40%, further confirming that the current seasonal window is unfriendly to longs. On historical extremes, the same period in 2016 recorded a strong gain of +30.3%, while 2021 saw a deep drawdown of -18.7%, a very wide range, warning that relying solely on seasonality carries high risk.
The current price sits at the 24.4% percentile of the 20-day channel, and the top-20 seats are net long 37,436 lots but down 9,236 lots on the day, showing that fund flows and seasonality resonate bearishly. Although the average gain is slightly positive, the negative median and low win rate form the main drag. If combined with the recent fundamental backdrop of inventory pressure and weak demand, the seasonal weakness may be further amplified. Historical statistics serve only as background reference; actual moves still need to be adjusted dynamically with the day's price action and macro data.
VII. Scenario Analysis
Base case (probability 60%): Price extends the bearish logic and tests lower support. Trigger condition: daily close fails to hold above 3103.33 (R1) or the night session effectively breaks above 3110. Target price is 3,045, corresponding to a risk/reward of 1:1.4. Recommended action: sell into strength, entry reference 3,089, stop-loss set at 3,120, horizon 1–5 days. If price breaks below 3,078.33 (S1), a further move to 3,045 is possible, but beware of oversold rebound risk.
Bullish case (probability 20%): Price breaks key resistance and turns range-bound with an upward bias. Trigger condition: daily close holds firmly above 3103.33 (R1) or the night session effectively breaks above 3110, accompanied by a significant increase in volume. Target price is 3,118, corresponding to a risk/reward of 1:1.3. If after the breakout price retests 3,103 without breaking, positions can be added, but strict stop-loss is required.
Bearish case (probability 20%): Price accelerates lower and tests lower support. Trigger condition: daily close breaks below 3,060 (20-day channel lower bound), and top-20 seat net long positions shrink further. Target price is 3,020, corresponding to a risk/reward of 1:1.5. Recommended action: accelerate shorting, entry reference 3,060, stop-loss set at 3,089, horizon 1–5 days. If 3,020 is broken, a move to 3,000 is possible, but policy intervention risk should be monitored.
The three scenarios sum to 100% probability, with the base case having the highest probability, consistent with the current bearish bias. The invalidation condition is the same as the base case: if the daily close holds above 3103.33 or the night session effectively breaks above 3110, the bearish thesis is invalidated and the stance shifts to neutral, on the sidelines.
VIII. Trading Strategies & Risk Management
The established strategy is to go short: entry at 3,089, stop-loss at 3,120, target 3,045, horizon 1–5 days, risk/reward ratio 1:1.4; a second short setup: entry at 3,089, stop-loss at 3,118, target 3,050, horizon 1–2 weeks, risk/reward ratio 1:1.3. The stop distance of 31 corresponds to 1.09× ATR (ATR14 28.5), contract multiplier 10, risk per lot 340 CNY (including commissions and slippage); the single-trade risk budget of 66,928 CNY implies a reference cap of 196 lots. The stop distance of 29 corresponds to 1.02× ATR (ATR14 28.5), contract multiplier 10, risk per lot 320 CNY (including commissions and slippage); the single-trade risk budget of 66,928 CNY implies a reference cap of 209 lots.
The stop-loss is placed at 3,120/3,118, designed to cover the invalidation conditions of a daily close holding above 3,103.33 (R1) or an effective night session breakout above 3,110, ensuring a timely exit when the thesis is wrong. Position sizing is calculated from the single-trade risk budget and the per-lot risk, capped at 196 or 209 lots, avoiding excessive exposure in a single trade. Add/reduce rules: if price breaks below 3,078.33 (S1), positions may be added, but total size must not exceed the cap; if price rebounds to around 3,103.33, reduce or close positions. Horizon of 1–5 days or 1–2 weeks, adjusted to market volatility to avoid overnight risk.
IX. This Week's Data Calendar
Beijing time October 14, 09:30, China CPI y/y expected 1.0%, prior 0.8%, surprise threshold ±0.2%; PPI y/y expected 4.4%, prior 3.8%, surprise threshold ±0.6%. 10:03 trade balance expected 790B, prior 809B, surprise threshold ±19B; 10:04 trade balance in USD expected 116.8B, prior 119.1B, surprise threshold ±2.3B. 16:03 M2 money supply y/y expected 7.4%, prior 7.5%, surprise threshold ±0.1%; new loans expected 1,025B, prior 60B, surprise threshold ±965B. 20:30 US core CPI m/m expected 0.2%, prior 0.3%, surprise threshold ±0.1%; core CPI y/y expected 2.5%, prior 2.4%, surprise threshold ±0.1%; CPI m/m expected 0.6%, prior 0.4%, surprise threshold ±0.2%; CPI y/y expected 3.6%, prior 3.4%, surprise threshold ±0.2%. October 15, 20:30, US core PPI m/m expected 0.3%, prior 0.2%, surprise threshold ±0.1%; core retail sales m/m expected 0.6%, prior 1.4%, surprise threshold ±0.8%; PPI m/m expected 0.6%, prior 0.4%, surprise threshold ±0.2%; retail sales m/m expected 0.3%, prior 1.2%, surprise threshold ±0.9%. October 16, 11:30, Fed Chair speech. October 19, 09:30, US new home prices m/m expected -, prior -; 10:00 energy production expected -, prior -; 10:00 fixed asset investment ytd/y expected -, prior -.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.