Chinese rebar rebounds with strong futures market
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The Chinese rebar market rebounded last week on strong futures prices. Spot market demand however is not as strong as expected, Kallanish notes.
In Shanghai on Friday afternoon, 20mm HRB400 rebar was trading at CNY 5,050-5,070/tonne ($779-782/t), up CNY 100/t from the week before. On the Shanghai Futures Exchange on Friday the January 2022 rebar contract closed CNY 114/t higher than Thursday at CNY 5,222/t, and CNY 122/t higher than last Friday.
The spot market saw a rebound at the beginning of last week following a sharp decline the previous week. Last Tuesday, the jump in futures drove up the spot market price, and sellers' confidence increased. But in fact, sales volumes that were not as good as expected and the market gradually cooled down in the last few days of last week, and traders had to cut prices again to boost sales.
Market participants expect that demand will gradually increase in September, leading to a recovery of steel prices. Therefore, on Friday afternoon, some traders tried to increase their offers to stimulate the market, but deals were not being reached at higher levels.
By Kallanish Team