Rebar futures slide after China announces ‘supervisory’ role in iron ore market
A sudden downturn in rebar futures on the SHFE put pressure on spot prices on Wednesday February 9, after a slump in iron ore futures was sparked by news that the Chinese authorities plan to strictly supervise speculation about the iron ore market
Eastern China (Shanghai): 4,860-4,900 yuan ($764-770) per tonne, widened downward by 10 yuan per tonne
China’s National Development & Reform Commission (NDRC) announced early on Wednesday that it would be taking a supervisory role in monitoring speculation and “fake news” in the iron ore market, leading to a sharp decline in iron ore futures.
The most-traded May iron ore futures contract on the Dalian Commodity Exchange closed the Wednesday trading session at 781 yuan per tonne, down by 40 yuan per tonne from Tuesday.
The iron ore losses led to bearish sentiment in steel futures, including rebar, which led some sellers in the spot market to lower their rebar offers.
And some rebar buyers withdrew orders completely to wait for further future price drops, sources told Fastmarkets.
“Iron ore prices will be under pressure [because of] the supervision, so rebar prices are likely to see smaller fluctuations than they typically do after the Lunar New Year holiday,” an industry analyst said.
Fastmarkets’ price assessment for steel reinforcing bar (rebar) domestic, ex-whs Eastern China was at 4,860-4,880 yuan per tonne on March 31 2021, up by 580 yuan per tonne (13.50-13.60%) from 4,280-4,300 on February 5, the last transaction day before Lunar New Year of 2021.
As of 3pm, steel billet was being traded at 4,670 yuan per tonne including value-added tax in Tangshan on Wednesday, up by 20 yuan per tonne from the previous day.
Shanghai Futures Exchange
The most-traded May rebar futures contract closed at 4,843 yuan per tonne on Wednesday, down by 69 yuan per tonne from Tuesday.