Although the macroeconomic situation and international economic situation become a bit better recently, Chinese steel market is finding it difficult to get rid of the imbalance between supply and demand due to oversupply of rebars driven by overcapacity.
Before coming to the factors influencing Chinese rebar market at present, we need to see the price movement since peak on July 3rd 2008, through Product Index for Rebar.
| Date | PI-Rebar |
| 3-Jul | 10279 |
| 1-Aug | 10034 |
| 1-Sep | 9226 |
| 1-Oct | 8774 |
| 1-Nov | 6921 |
| 1-Dec | 6812 |
| 1-Jan | 7004 |
| 1-Feb | 7244 |
| 1-Mar | 6660 |
| 1-Apr | 6343 |
| 1-May | 6478 |
| 1-Jun | 6493 |
| 1-Jul | 6793 |
| 01-Aug | 8295 |
| 01-Sep | 7012 |
| 24-Sep | 6725 |
This brings out the fact that rebar prices in April were much lower than prevailing today, defining scope of further lowering.
At present, national macro control policies remain stable, and the steel demand keeps increasing. As the effective export tax policy, international market demand rises up. In addition, the increasing credit quota provides production operation for foundation. Furthermore, Ministry of Public Works and CISA may take a new measure to conduct steel market.
Hebei Iron & Steel Group has published the price policy of October, announcing 10% cut for rebars
The steel manufactories’ overcapacity, high inventories, and traffic control in Beijing during the National Holiday are the main reasons causing that construction steel price is hard to increase. Moreover, the recent stable price has stimulated the end buyers’ desire to purchase. As we know, the rebar price has close to cost and the market will be in a slight state of consolidation during the holiday.
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(Sourced fromwww.steelprices-china.com)
