China’s spot steel prices fell further this week on thin trading and poor sentiment, continuing the drop that began three weeks ago.
Rebar prices in Shanghai dropped to 4,040-4,200 yuan ($640-666) per tonne on Friday May 4, which was 10 yuan lower than Thursday’s levels and 30 yuan lower than prices from a week earlier.
In Beijing, rebar prices on Friday were 10 yuan lower than on Thursday, at 4,210-4,280 yuan per tonne. It was the first drop since April 25.
Prices for hot rolled coil in Shanghai also lost 20 yuan to 4,260-4,270 yuan per tonne on Friday, or 40 yuan lower week-on-week.
Beijing’s HRC prices were flat at 4,280-4,300 yuan per tonne compared with Thursday’s figures, but it was 20 yuan lower than prices from a week earlier.
“Price cuts by steelmakers continue to push down spot sales prices this week,” a trader in Shanghai told Metal Bulletin.
Five steel mills cut their rebar and wire rod prices by 30-50 yuan per tonne on Friday.
Rizhao Steel cut its HRC price by another 50 yuan per tonne even though it had reduced its price by 20 yuan on Wednesday.
Apart from the price reductions, high inventory levels is also a factor contributing to the soft market and weak downstream demand.
The national rebar inventory in the major steel markets stood at 7.48 million tonnes, down 2% from a week ago but still 1.41 million tonnes higher than the same period in 2011.
The stock materials should be consumed as soon as possible to effect real recovery in steel consumption, market participants said.
Some steelmakers have begun to trim production this week.
Benxi Steel plans to conduct maintenance work on its HRC production line in late May, which will reduce production by 70,000 tonnes.
“If more producers cut output to shore up the market, spot prices may stabilize in June or July,” another trader in Tianjin said.
The October rebar contract on the Shanghai Futures Exchange settled at 4,248 yuan per tonne on Friday, up 7 yuan from Thursday but still 34 yuan lower than a week earlier.
The raw materials market remained quiet today, with spot prices for iron ore unchanged from Thursday at $147-148 per tonne cfr, but down $1 for the week.
The price of 150mm-diameter billet in Tangshan was also unchanged since Wednesday at 3,710 yuan per tonne, but it is 10 yuan lower than a week ago.