China domestic rebar prices increased sharply on Monday March 8 following futures gains and amid expectations that rebar demand from the housing sector will benefit from an expansion of the country’s high-speed railway.
*** Domestic china rebar
Eastern China (Shanghai) rebar : 4,740-4,760 yuan ($728-731) per tonne, up by 90-100 yuan per tonne
China aims to extend the total length of its high-speed railway to around 50,000 kilometers by 2025, covering 98% of its cities with over 500,000 residents, the director of China State Railway Group said during the recent “twin sessions” meeting in Beijing on March 4-5. This compares with the current length of around 40,000 kilometers and coverage of cities with over 1 million residents.
The high-speed railway will shorten the commute time between cities and attract people to settle down in small- and medium-sized cities, where house prices are much lower than in big cities, an industry analyst said.
The analyst expects third and fourth tier of cities will have strong housing demand, which will increase demand for rebar.
Monday’s price increase was also supported by futures gains and firmer demand.
Production restrictions in Tanghan from March 7 and in Handan from March 8 to improve air quality has led to expectations of constrained supply from the two cities, further buoying rebar prices.
China aims to extend the total length of its high-speed railway to around 50,000 kilometers by 2025, covering 98% of its cities with over 500,000 residents, the director of China State Railway Group said during the recent “twin sessions” meeting in Beijing on March 4-5. This compares with the current length of around 40,000 kilometers and coverage of cities with over 1 million residents.
The high-speed railway will shorten the commute time between cities and attract people to settle down in small- and medium-sized cities, where house prices are much lower than in big cities, an industry analyst said.
The analyst expects third and fourth tier of cities will have strong housing demand, which will increase demand for rebar.
Monday’s price increase was also supported by futures gains and firmer demand.
Production restrictions in Tanghan from March 7 and in Handan from March 8 to improve air quality has led to expectations of constrained supply from the two cities, further buoying rebar prices.
*** Market chatter
“My customers almost have resumed work after the Chinese New Year holiday (February 11-17), but end-user demand may not be strong this week due to rain in some days, so rebar prices will not keep the sharp rise as today,” a trader in Shanghai said.
*** Billet
As at 3pm, billet was being traded at 4,420 yuan per tonne including value-added tax in Tangshan, up by 20 yuan per tonne from last Friday.
*** Shanghai Futures Exchange
The most-traded May rebar futures contract closed at 4,752 yuan per tonne on Monday, up by 56 yuan per tonne from last Friday.
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Gain critical information on the demand drivers shaping the iron ore sector, including Chinese steelmaking and production forecasts in 2021 and beyond. Click here to register for the two-day virtual event Global Iron Ore 2021, to access all the related reports, news, and information free on demand.
Explore the six macro-economic and steel-specific dynamics set to rebalance the Asia steel and scrap market in 2021. Please read our full report Asia Steel and Scrap: Six Key Forces Driving 2021 today.
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