SHANGHAI, Oct 23 (SMM) – Most Chinese markets saw spot prices of construction steel rebar 100-200 yuan/mt lower from levels after the National Day holiday, as of October 22, as supply continued to expand on looser environmental restriction measures, which exacerbated a gloomy outlook for prices.
Unlike previous years, steelmakers in Jiangsu province, one of the major steelmaking hub in China, have yet to receive notice about production curbs, and this intensified concerns about greater supplies and triggered selloff before a slack season set in.
Environmental protection restriction measures have been so far implemented in Beijing, Tianjin, Hebei and surrounding areas. This narrowed the decline in local spot rebar prices to 30-60 yuan/mt during October 8-22.
While steel consumption weakened in north-east China on colder weather, overall demand from the construction sector held firm in a peak demand season. However, this failed to counter rising supplies given heavy inventory pressure seen in most areas.
Without an expansion of environmental cutback in the near term, rebar prices may weaken further amid bearish sentiment.
SMM assessments showed that rebar prices in Shanghai eased as much as 150 yuan/mt from October 8 and stood at 3,610 yuan/mt as of October 22, while prices in Beijing fell 30 yuan/mt during the same period and came in at 3,590 yuan/mt.