China domestic rebar prices increased on Wednesday April 21 on the news that the country’s Ministry of Industry & Information Technology (MIIT) will not permit the steel industry to increase capacity in 2021.
*** China domestic rebar
Eastern China (Shanghai): 5,040-5,070 yuan ($776-780) per tonne, up by 40 yuan per tonne
MIIT made the statement in a work report on April 20, and is not the first time the ministry has brought the issue up. But the announcement was enough to prompt speculation in the futures market and push prices up.
The spot market followed suit although not all buyers accepted the rise, sources said. A trader in Shanghai said his sales volume was a little bit lower than on Tuesday.
*** Market chatter
“It seems that the central government will take tough measures to push down steel output this year. If so, steel mills may cut more rebar than hot-rolled coil because the former’s profit has been lower than the latter’s for a long time and the housing sector is less encouraging than manufacturing,” a second trader in Shanghai said.
As of 3pm, billet was being traded at 4,940 yuan per tonne including value-added tax in Tangshan, unchanged from a day earlier.
Re-rolling mills in Fengrun, Tangshan were required to suspend production from April 22 to the end of this month, which will weaken billet demand. But mills in other districts can still operate at 70% of production capacity, an industry analyst said.
*** Shanghai Futures Exchange for China rebar
The most-traded October rebar futures contract closed at 5,188 yuan per tonne on Wednesday, up by 23 yuan per tonne from a day earlier.
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