China’s domestic rebar prices were flat on Tuesday April 20 despite strength in the futures market because sellers were actively destocking.
Eastern China (Shanghai): 5,000-5,030 yuan ($767-772) per tonne, unchanged
End users have continued to ask for lower prices since last week, saying rebar prices are way higher than their budget, market sources said.
As a result, sellers were unable to raise spot rebar prices in line with the stronger futures market.
Sellers could achieve a good profit by offloading their current inventories, so they plan to sell as much as possible in case prices drop.
If the high production rate of rebar pushes down prices, traders will earn less money, a Shanghai-based trader told Fastmarkets.
Market chatter ***
“The futures gains in the afternoon stimulated some buyers to raise procurement rates, but most others still continued to purchase limited tonnages,” a second trader in Shanghai said.
As at 3pm, billet was being traded at 4,940 yuan per tonne including value-added tax in Tangshan, down by 20 yuan per tonne from a day earlier.
Billet demand has declined because re-rolling mills are required to cut emission for better air quality from the past weekend until the end of the month.
Shanghai Futures Exchange ***
The most-traded October rebar futures contract closed at 5,165 yuan per tonne on Tuesday, up by 83 yuan per tonne from a day earlier.
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