SHANGHAI, Apr. 10 (SMM) - Shasteel will likely maintain its rebar ex-works prices steady in mid April, with prices for second grade rebar of RMB 3,690/mt, and prices for third grade rebar up RMB 100/mt.
First, market fundamentals turn around. Inventories fell while demand improved. But supports from fundamentals for prices will be limited.
Second, effects from new regulations to the property market, environmental protection and urbanization weakened recently.
Third, profits at distributors grew. Shasteel's price for second grade rebar was RMB 3,690/mt in Hangzhou, and ex-works prices for traders in east China were RMB 3,650/mt, so they can gain RMB 40-60/mt of profits including discounts.
Shasteel will conduct maintenance at its production line, converter and blast furnace, with 40,000 mt of rebar output affected. But the 10% discounts for rebar orders in April reflect inventories at steel plants remain high. Besides, Shasteel cut output for second grade rebar since early April, while Shuicheng Iron & Steel, Kunming Iron & Steel and Yonggang also began to cut second grade rebar proportion. Third grade rebar supply is expected to grow in May. In general, despite profits at distributors improved, the market has yet to turn around noticeably, so steel plants should remain cautious.