Posted on 02 Jul 2021
China’s domestic steel prices have continued losing ground since mid-June, stabilizing only for a single day on June 29. According to Mysteel’s assessment, as of June 30 the country’s national price of HRB400E 20mm dia rebar, a barometer of the domestic steel-market sentiment, had declined by a huge Yuan 275/tonne ($42.5/t) from June 11 to reach Yuan 4,939/t.
In tandem with the sharp drops in domestic steel prices, steel demand has shown signs of steadily weakening, a trend which market sources chiefly attributed to tight cash flow among construction contractors at the end of China’s H1 business year which had constrained their normal steel-purchasing activity.
The daily trading volume of construction steel including rebar, wire rod and bar-in-coil among China’s 237 traders under Mysteel’s tracking reached 184,268 tonnes/day on average over June 15-30, or down 11.2% or by 23,221 t/d from June 1-11. This compares with the far higher results for May and April of 212,771 t/d and 260,471 t/d respectively, according to the database.
In addition, speculative trading in steel among participants in the country’s spot market has declined substantially and in some cases almost disappeared, Mysteel Global noted.
The seasonal period of low steel consumption during June also led to the softening of domestic demand, with East and South China entering the rainy season, while North China has been experiencing high summer temperatures.
Meanwhile, the operations of more steel producers in North and East China were placed under stringent restrictions towards the end of June in preparation for grand celebrations from July 1 to mark the centenary of the founding of the Communist Party of China, sources also noted.
In June, China’s index of new steel orders including domestic sales and exports fell for the third straight month, dipping by 4.6 basis points to 34.8, as reported.
Source:Mysteel Global
