CHINA REBAR: Market sentiment brightens as virus concerns lessen in China

Market sentiment in the Chinese domestic rebar market was optimistic on Thursday March 12 after the National Health Commission (NHC) announced the peak of the novel coronavirus (2019-nCoV) in China has passed.

China’s domestic rebar prices edged down in the eastern region but kept flat in the north.

Eastern China (Shanghai): 3,430-3,460 yuan ($492-496) per tonne, down 10 yuan per tonne
Northern China (Beijing): 3,300-3,340 yuan per tonne, unchanged

The fall in the Eastern China assessment was attributed to a drop in the rebar futures price in the first hour of trading, which caused some sellers to cut their spot rebar prices to destock.

The Shanghai Futures Exchange May rebar futures price fell by 31 yuan per tonne to 3,466 yuan per tonne as of 10am, the price later recovered to close up 24 yuan per tonne from a day ago.

Participants’ outlook became bullish after the NHC announced in the afternoon that the worst of the coronavirus spread in China was over.

The number of new cases dropped to 15 on March 11 from 202 cases on March 1, according to the NHC.

Market watchers hope this signals the start of a recovery in demand and a resumption of normality in the rebar market.

Fastmarkets’ steel reinforcing bar (rebar) index export, fob China main port: $445 per tonne, down $0.50 per tonne

Offers were unchanged at $445-465 per tonne fob.

Bids were $15-25 per tonne lower at $430-440 per tonne fob.

China’s steel mills were willing to take orders at $445-450 per tonne fob but no buyers were ready to buy at those prices, sources said.

Market chatter
“End-user demand is rising, but stockists have destocking needs. These factors will cause a fluctuation in rebar prices in the coming one or two weeks,” a trader in eastern China said.

As at 3pm, billet was being traded at 3,130 yuan per tonne including value-added tax in Tangshan, up 10 yuan per tonne from a day earlier.

Shanghai Futures Exchange
The most-traded May rebar futures contract closed at 3,521 yuan per tonne on Thursday, up 24 yuan per tonne from 3,497 yuan per tonne a day earlier.