China’s domestic rebar prices fell rapidly on Wednesday May 19 on softer demand as a result of rain.
Eastern China (Shanghai): ۵,۳۷۰-۵,۴۰۰ yuan ($836-840) per tonne, down by 180 yuan per tonne
Heavy rain in many parts of eastern and southern China during the day affected both construction activity and transportation.
With wet weather forecast to continue over the next day days, market participants are expecting end-user demand to weaken further.
The bearish outlook weighed on spot prices.
Steel mills also lowered their ex-works prices to attract buyers, but the move put even more pressure on the spot market, resulting in buyers withdrawing to the sidelines to see if more cuts will emerge.
Market chatter ***
“This downtrend will not persist because end-user demand is still good enough to support prices. They may drop to mills’ production cost [of around 5,200 yuan per tonne] before picking up again,” an industry analyst said.
New construction starts by floor area in the first four months of 2021 totaled 539.05 million square meters, up by 12.8% year on year while infrastructure investments increased by 18.4% year on year in the same period, according to China’s National Bureau of Statistics.
As at 3pm, billet was being traded at 5,470 yuan per tonne including value-added tax in Tangshan, down by 70 yuan per tonne from a day earlier.
Shanghai Futures Exchange ***
The most-traded October rebar futures contract closed at 5,309 yuan per tonne on Wednesday, down by 301 yuan per tonne from a day earlier.
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