DAILY: China's spot rebar prices fall to 8.5-month low amid weak market sentiment

- Heavy rainfall and high temperatures weigh on construction demand

- Futures weakness dampens buying interest across spot markets

China’s rebar prices in both spot and futures markets witnessed further declines on July 28, while transactions also lost ground again after just a one-day recovery, as actual long steel consumption across the country remained subdued amid the ongoing summer lull.

The national price of HRB400E 20mm dia rebar dropped for the third consecutive workday to sit at Yuan 3,259/tonne ($481/t) including 13% VAT on Tuesday, edging down by a larger Yuan 12/t from the prior day and marking the lowest level since mid-November last year, according to Mysteel’s assessment.

In the derivatives market, futures prices of key ferrous commodities in China posted broad-based losses, with the most-traded rebar futures contract for October delivery on the Shanghai Futures Exchange retreating by 0.65% from Monday’s settlement price to close the daytime trading session at Yuan 3,060/t on Tuesday.

Being caught in the bearish sentiment, a steelmaker in South China on Tuesday cut its ex-works prices for long steel items by Yuan 20/t to Yuan 3,135-3,445/t including the 13% VAT, Mysteel learned.

The scorching heat across much of the country and heavy rainfalls brought by the Typhoon Noul to southern China posed pressure on downstream demand for long steel items in the near term. This, combined with the dropping futures prices, eroded market confidence and dampened end-users’ interests in replenishing stocks, Mysteel Global noted.

As such, the combined tonnage of rebar, wire rod and bar-in-coil traded among the 237 trading houses under Mysteel’s tracking settled low at 77,390 tonnes/day on Tuesday, down by 9.5% or 8,088 t/d on day.

Prices of semi-finished steel also lost ground amid downbeat sentiment, with the price of Q235 150mm square billet in Tangshan in North China’s Hebei province sliding by Yuan 20/t on day at Yuan 2,940/t EXW including the 13% VAT on Tuesday, according to Mysteel’s assessment.

Note: This article is published as part of a content exchange agreement between Mysteel Global and BigMint.