Chinese rebar prices surprised in H1 2017, supported by strong construction demand and supply disruptions due to the closure of induction furnaces. With domestic prices so high, exports have become unappealing and have fallen sharply. In turn, this allowed the rest of the world to increase utilisation rates, supporting global prices. High production costs and rampant protectionism also sheltered prices in Europe and the US. But the demise of price support is imminent. We expect a sharp readjustment between 2017 and 2018. In the medium term, a weak cost structure will mean prices remain subdued.