Steel prices in China hit three-month low on poor construction demand, ET RealEstate
Steel prices in China fell to a more than three-month low on Wednesday, hurt by poor demand due to a weak construction sector in the world’s biggest consumer of the metal alloy.
Rebar on the Shanghai Futures Exchange (SHFE) fell as much as 1.1% to 3,471 yuan a metric ton, the lowest since April 8. The contract closed down 0.9% at 3,478 yuan.
Latest data from China showed domestic demand continued to recover at a slow pace, and construction data showed double digit percentage fall in the first five months of the year.
SHFE hot-rolled coil steel dropped to as low as 3,680 yuan a ton, also a level not seen since April 8. It ended down 0.7% at 3,681 yuan.
SHFE wire rod steel shed 0.8% to 3,660 yuan a ton and stainless steel dropped 1.4% to 13,930 yuan.
The most-traded September iron ore on China’s Dalian Commodity Exchange (DCE) declined 1.8% to 813 yuan a ton, while benchmark August iron ore contract on the Singapore Exchange dropped 3.4% to $107.70 a ton by 0700 GMT.
DCE coking coal fell 2% to 1,531 yuan a ton, and coke declined 1.1% to 2,215 yuan.
However, the price decline is seen limited.
“Although demand has been weak, it’s not like it has evaporated completely. So… any fall in prices will not be overly dramatic especially given that a lot of the negativity has been priced,” said a trader.
The supportive levels for SHFE rebar contract is around 3,360 yuan and for hot-rolled coil contract is 3,600 yuan, the trader said.
Markets participants have been eyeing China’s key political meeting next week as they hope for supportive policies to boost demand of steel.
“There might be some talks of boosting economy etc., but I think what market is looking for are details,” said the trader.
