Thursday, Mar 03
Chinese steel prices continued to fall this week with traders struggling to justify purchases amid a domestic credit crunch and uncertain demand..*
Rebar prices in Shanghai stood at 4,650-4,660 yuan (S$899.80- $901.71) per tonne on Thursday, down 110 yuan since last week.
“We aren’t buying until we have a better idea what demand will look like in the next few months, but the spike in prices in the first two months of the year looks to be unsustainable,” said a steel trader based in Beijing.
The most traded rebar contract for October delivery on the Shanghai Futures Exchange fell 1.6 percent over the week to close at 4,813 yuan per tonne on Thursday. Prices have now fallen 8 percent since peaking at 5,230 yuan on Feb. 11.
Henry Liu, commodities analyst with Mirae Asset Securities in Hong Kong, said the critical problem for steel traders now was the availability of credit.
“The interest rate hike hasn’t been so awful for traders as long as the commodity prices are high, but the really painful thing is the credit crunch – steel traders cannot borrow money,”he said.
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