Metalnewsnet 5 May ：

The steel prices in China have been in correction over the last fortnight. The malaise as afflicted all the products, however the reason for revival can be different for each product variable on the state policies and demand scenario in each case.

The prices for rebar have dipped by up to 4 % since mid April. However the traders are not apprehensive of a debacle terming it as normal correction likely to make a turnaround with a positive enunciation of government policies.

Rebar
20mm
HRB 400

Change is on May 4th 2010 as compared to April 15th 2010

According to a market research group the prices of rebar rolled back by some CNY 100 per tonne to CNY 200 per tonne at major locations due to sluggish demand as an offshoot of demand aberrations in the short run and ambiguous financing policy of government.

One of the immediate factors has been the inauguration of 6 months EXPO at Shanghai. There was a spurt in the penultimate days before the EXPO since it was imperative to conclude a batch of projects. However with the commencement of EXPO the demand wanes as government policies restrict construction projects and transport in the city and surrounding areas.

Although the cost push to the construction steel price rise is weakening denying the mills of any justification for price hike the irony is that most of the mills are done with quantum price hikes over the last 2 months hence nullifying any effects of recent cost reduction.

The ambiguity over quarterly price/index settlement, ensuing monsoon in India, imposition of 15% duty on lumps and hike in freight by INR 100 per tonne is bound to recharge the cost push factor.

The state has been hyper active in its quest to putting semblance of order and system in the reality sector which has been beset with malpractices and speculation leading to vacillation in price and bloated profiteering. State has banned financing purchase of 3rd house.

Consequently these policies have dented the real estate developers’ and steel traders confidence, although hasn’t caused material reduction in steel demand.

Demand for rebar is expected to be slow during the EXPO since traders and mills will primarily sell their construction steel in the surrounding areas thereby prices in Shanghai being CNY 100 per tonne less than its adjoining areas. However the market price of rebar is not expected to bulk further as it has already hit the floor with negative gap of CNY 150 per tonne to 200 per tonne with mills.

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( from Steelprices-china)