Posted on 05 Mar 2021
Prices in China’s steel futures market increased significantly on March 3 as demand showed further signs of recovery and production restrictions in Tangshan in North China’s Hebei province were tightened further, Mysteel Global noted.
The price of the most traded rebar contract on the Shanghai Futures Exchange (SHFE) for May delivery increased by Yuan 180/tonne ($27.8/t) or 3.9% on Wednesday from the settlement price on March 2 to close at Yuan 4,842/t when the daytime trading session ended. In the meantime, the SHFE’s May hot-rolled coil contract price also moved up Yuan 168/t or 3.5% on day to Yuan 5,026/t.
“Steel prices have increased a lot after the Chinese New Year holiday, the major stimulus at that time being optimism regarding future consumption because actual demand was yet to fully recover. But now, trading activity is truly showing signs of resumption as work on most construction projects in East China restarted this week,” a Shanghai-based futures analyst said.
The trading volume of construction steel comprising rebar, wire rod and bar-in-coil among 237 traders across China under Mysteel’s survey increased by 75,428 tonnes/day or 62.1% on day to 196,876 t/d on March 2, close to the trading volume in seasons when consumption is robust.
“I believe the rebar futures price for May will not see any significant decline in the few months remaining prior to physical delivery,” an analyst in East China’s Shandong province said, indicating his confident expectations for steel demand for the first half of 2021.
Behind the price rise too were the tightening curbs on production introduced in Fengrun District in Tangshan, where the city government requested local enterprises including steelmakers to suspend the loading and unloading of trucks to reduce air pollution. When the restrictions will be eased remains unclear, Mysteel Global noted.
Source:Mysteel Global
