Posted on 04 Nov 2021
China's domestic rebar price has been on a downtrend since October 11 with the growing concern on the country's steel demand and little support from the steelmaking raw materials prices including iron ore, and the serious slumps in both rebar and iron ore prices on November 2 was a clear indication is that the market concern has been confirmed and winter has come to China's steel market too.
On November 2, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment plunged to Yuan 5,188/tonne ($811/t) including the 13% VAT - a nearly four-month low, or having lost Yuan 851/t from the recent high at Yuan 6,039/t on October 9.
Also on Tuesday, Mysteel SEADEX 62% Australian Fines slumped to $96.8/dmt CFR Qingdao, the first time after September 21 to fall below the $100/dmt threshold or having lost about $40/dmt from its recent high at $136.25/dmt on October 11.
Source: Mysteel
Starting November and for the rest of 2021, China's domestic steel demand will probably stay tepid due to the seasonal impact on outdoor construction works as well as the slowdown in the real estate sectors with the lack of confidence among the developers and tight capital flow with some.
Spot trading volume of construction steel including rebar, wire rod and bar-in-coil among China's 237 steel traders under Mysteel's survey already suggested a weaker October, with the trading volume averaging 175,957 tonnes/day, down 18.6% on month or 27.9% lower on year.
China's iron ore fundamentals appear sluggish too, as in the last week of October, blast furnace utilization rate among China's 247 steel mills eased for the second week to 78.83%, a rather low level ever since the recovery since March 2020, while imported iron ore inventories at China's 45 major ports mounted to about 145 million tonnes as of October 28, or a new high since April 5 2019.
Weakening in demand and finished steel prices and anticipated lower steel output under the series of curtailing measures including power rationing and the annual winter restriction, thus, is unlikely to send much support to any ferrous commodities, and it will be of little surprise for related prices to be unable warm one another up.
Source:Mysteel Global
