China’s steel rebar futures fell for a third straight session on Monday, dragging raw materials down, on continued worries about waning demand amid environmental inspections.
“Steel market is under pressure despite the outlook of tight supply during the coming autumn and winter season amid environmental inspections,” Orient Futures analysts said in a note.
“However, the inspection is a double-edged sword that will curb both supply and demand sides. What the market worries the most is waning demand from the downstream sectors.”
China’s capital, Beijing, said over the weekend that it will suspend construction of major public projects, including housing demolition and road projects, in the city this winter to improve its air quality. The ban will be effective from Nov. 15 to March 15.
The most-active construction steel futures on the Shanghai Futures Exchange were down 1.5 percent at 3,762 yuan ($574.59) a tonne, after touching their lowest in nearly four weeks at 3,742 yuan earlier in the day.
Spot rebar prices fell 0.3 percent to 4,361 yuan a tonne on Friday, according to data on the website of Mysteel consultancy.
Rebar stockpiles of Chinese traders had risen 118,400 tonnes to 4.72 million tonnes by Friday, data from Mysteel showed.
The most-traded iron ore on the Dalian Commodity Exchange dropped 1.6 percent to 501.5 yuan a tonne, despite falling inventories at the ports.
Inventories of imported iron ore at ports reduced 1.29 million tonnes from a week earlier to 132.61 million tonnes by Friday, Mysteel data showed, as mills’ appetite for high-grade iron ore remains strong.
“Restocking demand for raw materials at mills is firm at this moment despite Beijing’s curb on production. However, the expectation of waning demand in near future adds pressure on iron ore prices,” said Orient Futures analysts.
Prices for raw fuel materials also plunged on Monday. The January coking coal contract fell 6.3 percent to 1,272.5 yuan a tonne. Coke futures on the Dalian Commodity Exchange tumbled 6.7 percent to 2,172 yuan a tonne.