Shanghai rebar slips on fragile China demand recovery
Chinese rebar futures slipped on Monday after reaching an eight-session high in the previous session, as traders opted to wait and see if the fragile pace of a recovery in demand for the construction material can be sustained this week.
Prices of iron ore and other steelmaking inputs in China, the world’s biggest steel producer, also pulled back.
The most-active January rebar contract on the Shanghai Futures Exchange SRBcv1 ended daytime trade 0.1% lower at 3,765 yuan ($526.43) a tonne.
It climbed to 3,787 yuan on Friday, its strongest since Sept. 15, buoyed by signs of increased activity in China’s construction sector and pre-holiday demand.
“While ‘Golden September’ has been highly disappointing from a steel consumption perspective, there’s still time before the dawn of the week-long National Day Holidays from Oct. 1,” said Navigate Commodities Managing Director Atilla Widnell.
“We will need to see if there’s a continuation of the promising construction steel trading volumes which emerged late last week.”
Chinese steel demand usually picks up in September and October when construction activity is at its peak.
Shanghai rebar gained 2% last week, supported by data showing daily construction steel trading volume surging and property developer Evergrande saying 668 of its projects had resumed construction.
Those price-supportive news, along with hopes of more stimulus to shore up China’s COVID-hit economy, also buoyed iron ore prices last week.
Iron ore’s benchmark January contract on China’s Dalian Commodity Exchange DCIOcv1 was down 1.5% at 710.50 yuan a tonne by 0700 GMT.
On the Singapore Exchange, iron ore’s most-traded October contract SZZFV2 tumbled 2.7% to $95.30 a tonne.
Dalian coking coal DJMcv1, which rallied to an 11-week high on Friday on worries about another supply crunch, and coke DCJcv1 dropped 1.2% and 1.4%, respectively.
Shanghai hot-rolled coil SHHCcv1 shed 0.1%, while stainless steel SHSScv1 lost 2%.
Source: Reuters (Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu)