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Kallanish Kallanish

Knowledge matters Knowledge matters

September, 28th 2020

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SEP 11
11:12

Chinese rebar falls on lower demand

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The Chinese rebar market has fallen after earlier strong gains, but market expectations nevertheless remain firm, Kallanish notes.

In Shanghai on Friday afternoon, 20mm HRB400 rebar was trading at CNY 3,620-3,630/tonne ($530-531/t), down CNY 30/t from the previous week. On the Shanghai Futures Exchange, meanwhile, the rebar contract for January 2021 closed at CNY 3,665/t, CNY 89/t lower compared with last Friday but CNY 25/t higher than Thursday.

Market supply remains stable, but transaction volumes in the spot market are below expectations, which has led to a drop in rebar prices. However, the negative trend stopped on Friday, and purchasing by construction sites led to an increase in demand. 

Traders say rain in Shanghai over the weekend will reduce demand, but it will recover thereafter. In addition, the market will restock in late September before China's October holiday, so demand is expected to remain strong.