Informed sources told Fast Market analytical magazine that rebar futures on the Shanghai Stock Exchange rose on Tuesday, August 10, and trades boomed due to applicant growth. According to Metal Bulletin, production is expected to decline widely by the end of 2021. This issue has led the applicants to the deal despite the high prices in the Chinese rebar market is likely to increase trade in the area, such as iron ore and hot and cold rolling. In the following, we will deal with the Metal Bulletin report from the Chinese national market. Please be with Artan Press.
*** Decrease in futures trading in the Chinese rebar market
Last week, steel and iron ore futures traded in a limited range in the Chinese market. All markets recorded weekly declines due to weak seasonal demand and speculation about more control over steel production. Iron ore futures, for example, fell 12.9 percent, the biggest weekly drop since the week ending February 28, 2020. The Fitch Institute has made this the subject of its analysis.
Iron ore and rebar prices are highly interdependent. Iron and steel prices have shown signs of weakness after a long rise, and iron ore has fallen sharply in the past month. In the future, improving supply and reducing consumption by the lower classes will reduce both profits. China’s rebar market appears to be approaching its goals. China is currently seeking to suppress prices in commodity markets.
*** Orderly reduction of steel production in Hebei Province, China
Hebei plans to cut 21.71 million tonnes of crude steel production in 2021 from 2020, according to a local data provider on Monday. Reducing crude steel production would mean a drop in Chinese rebar production. So that the steel hub of Tangshan province has reduced its production in recent months by 12.37 million tons. This is intended to improve air quality during the Beijing Winter Olympics.
Therefore, with these signals, the price of steel in East China was traded at 5,200-5,230 yuan ($ 802-802) per ton, which has experienced an increase of 10-20 yuan per ton. Weekly consumption of major steel products in China fell 2.5 percent to 9.86 million tons as of August 5, compared to the previous week.
*** Increasing the price of Chinese rebar under the pretext of reducing production
In this report, market analysts say that other areas of Hebei province have not yet made significant changes compared to 2020 and need to reduce crude steel production by 9.34 million tons before the end of the year. Market traders said that some other provinces have similar regulations to reduce carbon emissions, and expect production cuts to lead to higher steel prices in the next four or five months, leading to higher prices in China’s rebar market. Market traders followed futures and raised their prices, while some buyers decided not to follow this price increase.
*** Safeguard rebar price growth in northern China
Market observation shows that the overall supply in the Chinese rebar market is currently satisfactory and meets the needs of the market, and some sellers with high inventory have decided to reduce their stock. Because tax risks will lurk in Jane’s futures. Therefore, it seems that in the northern parts of China, due to sufficient supply, the Chinese rebar market will not fluctuate, at least in the short term.
*** The impact of the billet market on fluctuations in the Chinese rebar market
Given that the Chinese rebar market is a multifaceted market and its fluctuations and inflammations enter the related markets, so it is not bad to have a look at your billet transactions in the Chinese market. As of 3 p.m. local time on Tuesday, August 10, steel ingots were trading at 5,080 yuan per tonne, including VAT, unchanged from Monday in Tangshan. The highest October rebar futures contract was concluded on Tuesday at 5,437 yuan per ton, up 107 yuan per ton from the previous day.
The price of rebar on the Shanghai Stock Exchange for delivery in October fell by 1% to 57,379 yuan per ton. The price of hot rolled coils also fell 0.7 percent to 5,772 yuan per tonne. From July 20 to August 5, the price of UAE imported rebar remained stable at $ 797 and 50 cents throughout the period.
*** The Chinese government’s dictatorial action in suppressing steel prices
Reducing prices in the Chinese rebar market seems to be a political affair. Futures in this area were accompanied by a growth of $ 100 per ton, which shows that the Chinese government, in the eyes of investors, can not continue the price suppression for a long time. Although rebar prices have remained stable in northern China, prices are rising in other parts of China. The average price of rebar increased by 79 yuan to 5,326 yuan per ton. Hot rolled sheet also increased by 104 yuan and sold at an average price of 5,713 yuan. Furthermore; Coil rebar decreased by 90 yuan to an average price of 5,831 yuan per ton. Stainless steel fell 51 yuan to 17,599 yuan.
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