Shanghai steel rebar futures fell more than 1 percent on Wednesday after a surprise interest rate hike by China dragged down commodities and equities across the world.
But the rate hike, China’s first in nearly three years, does not necessarily mean demand from the world’s biggest consumer of many commodities will fall, analysts say.
Instead, it shows the government’s resolve in ensuring the world’s fastest-growing major economy does not overheat.
“We’re not saying that just because we had this rate hike we’re going to be in a structural disaster for commodities,” said Graeme Train, analyst at Macquarie Securities in Shanghai.
“But it will hit market sentiment which is why you will see near-term price weakness.”
“Spot iron ore fines stayed at $157-158/MT levels (CFR China), ” number of queries have gone down, buyers are cautious placing orders at these levels” said an exporter based in Mumbai , India.
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