China’s domestic rebar prices dropped on Monday July 27 amid weakness in the futures and billet markets, though end-user demand was reported as “good.”
***Domestic
- Eastern China (Shanghai): 3,580-3,600 yuan ($510-513) per tonne, down by 30-40 yuan per tonne
Rebar sellers lowered their offers in the morning in response to falling futures.
They were hoping to generate more sales by doing so since end users have mostly returned to the spot market following improved weather, a trader in eastern China said. The country was inundated with torrential rain with the onset of summer, which led it to experience the worst flood in decades.
High inventory levels for rebar in the spot market also put pressure on prices, sources said.
The spot market had 8.55 million tonnes of rebar last Thursday, up by 132,000 tonnes from a week earlier, according to a local industry information provider.
***Export
- Fastmarkets’ steel reinforcing bar (rebar) index export, fob China main port: $470.37 per tonne, up by $0.37 per tonne
Export offers for rebar were flat during the day, at $485 per tonne fob, and workable prices for Chinese mills were estimated at around $470 per tonne fob.
Market participants are not expecting mills to offer much discount to overseas buyers due to their optimistic outlook for domestic demand and prices in September. Current export offers are for cargoes to be shipped in September.
***Market chatter
“Today’s rebar futures’ drop is due to the risk-aversion sentiment caused by the escalating tensions between China and the United States. But the outlook for downstream sectors such as construction is positive for the coming months, so spot rebar prices are unlikely to trend downward,” an industry analyst in Shanghai said.
***Billet
As at 3pm, billet was being traded at 3,390 yuan per tonne including value-added tax in Tangshan, down by 30 yuan per tonne from last Friday.
***Shanghai Futures Exchange
The most-traded October rebar futures contract closed at 3,723 yuan per tonne on Monday, down by 24 yuan per tonne from last Friday.
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