SHANGHAI, Apr 24 (SMM) – Rebar prices in China’s spot market saw a sharp uptick on Monday April 23, rising up to 70 yuan/mt in some parts of China such as Hangzhou, SMM learned. Drawn by the surge in prices, market participants were keen to cash in on concerns that demand may soon ease.
SMM expects robust demand to sustain the growth of prices of spot rebar. However, prices may weaken in the second half of this week if market participants step up cashing in after the significant increase in prices on April 23.
Hangzhou saw relatively brisk trading on April 23. Rebar from Jiangsu Shagang, the largest privately owned steel company in China, was offered between 3,940-3,950 yuan/mt. This is up to 70 yuan/mt more than the level on Friday April 20.
Profits for market participants were significant. Costs stood at 3,750 yuan/mt during April 1-10, at 3,770 yuan/mt during April 11-20 and at 3,890 yuan/mt during April 21-30. Market participants could gain about 170 yuan/mt with cargoes purchased during April 11-20 and gain about 50 yuan/mt with cargoes purchased after April 20.
The Shanghai area performed similarly with some market participants shipping up to 5,000 mt during the day.
Prices in the Guangzhou area rose 30-50 yuan/mt during the day with relatively brisk shipments. Some market participants shipped over 10,000 mt during the day. Despite the upcoming rainy season, the market remains upbeat and demand in south China continues to hold up.
However, shipments in Chengdu were weak and market participants were pessimistic. Open prices of rebar from Desheng Steel were offered 10-20 yuan/mt higher, to 4,050-4,060 yuan/mt.
An SMM survey showed that downstream demand in April surged from March. We see limited further upward room in demand in May, after this sharp increase. Demand may weaken as many construction sites are already operating at full capacity and as the rainy season approaches.
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