Rebar prices to exceed HRC prices in short run

SHANGHAI, Aug 30 (SMM) – Stronger demand from the infrastructure sector may continue to support rebar prices to stand above hot-rolled coil (HRC) prices in the near run, SMM believes. 

Operating rates across construction sites are expected to pick up in September and October as the weather improves. This will also buoy prices of rebar. 

Rebar prices grew faster than that of hot-rolled coil, and this grew rebar premiums from August 6-22. Before August 6, rebar prices stood at a discount over HRC, SMM learned.  

While frequent environmental limits in Tangshan, Hebei, and Shanxi bolstered prices of rebar and HRC from the beginning of July, prices of HRC grew slower due to weaker demand and the hot weather. Consumption of rebar received strong support from China’s infrastructure development policies. 

As of Wednesday August 22, rebar prices gained 524 yuan/mt from the start of July, to a high of 4,589.6 yuan/mt. Prices of HRC increased 160 yuan/mt to 4,422.5 yuan/mt, SMM assessed. 

While prices of both products began to dip from last Wednesday, extended environmental cuts will prevent prices from declining drastically, SMM believes.  

Tangshan has required all polluting sintering machines, shaft furnaces, and lime kilns to halve production from 18:00 CST on Wednesday August 29 to 12:00 CST on Monday September 3, SMM learned. 

As of Wednesday August 29, domestic rebar prices averaged 4,523.8 yuan/mt while that of HRC averaged 3,962.2 yuan/mt, according to SMM assessment.