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The four-day plenary meeting ended on Tuesday November 12 with a decision to “deepen economic reforms”, but details are lacking.
“The third plenum's communiqué is not exciting,” Bank of America Merrill Lynch said in a research note on Wednesday.
“Our overall impression is that there is nothing significantly new on the reform front. In addition, the leaders still seem to emphasise stability over decisive actions. This has strengthened our opinion that many of the tough reforms that involve significant income redistribution, including land, hukou (China’s household registration system) and budget-related [matters], may prove difficult to implement,” it said.
Chinese stock markets dipped at when they opened on Wednesday. Both the Shanghai Composite Index and Shenzhen Component Index were down 1% to 2,101 points and 8,189 points respectively as at 10.10am Beijing time.
On the Shanghai Futures Exchange, the most-traded May rebar contract was trading at 3,667 yuan ($598) per tonne as at 10.10am Beijing time, up 7 yuan ($1) per tonne from its opening for the day, but down 3 yuan ($0.40) per tonne from Tuesday’s closing price.
“I don‘t think the third plenum will give any upward momentum to the steel market at the moment. The market had high expectations of the plenum earlier, which boosted sentiment and pushed up prices. But now I am not sure whether this sentiment can last as no detailed incentive policy has been published,” a steel mill source in Jiangsu province said.
The most-traded May iron ore futures contract on the Dalian Commodity Exchange was at 945 yuan ($154) per tonne as at 10.10am Beijing time, up 2 yuan ($0.30) from Tuesday’s close. It hit a seven-day high of 952 yuan ($155) per tonne at about 9.30am on Wednesday.
“BHP Billiton is testing the impact of the third plenum by offering a tender today,” an iron ore trader in Shanghai said.
The miner is offering 80,000 tonnes of 62.7% Fe Newman fines with a laycan of November 21-30. The tender was to have concluded at noon.
Markets were indifferent during Wednesday November 13’s early sessions following the conclusion of the third plenary session of the Communist Party of China’s central committee a day earlier.