Benchmark indicators of Chinese steel Industries health, steel and iron ore futures at SHFE and DCE respectively went down further on Wednesday
Rebar prices on the Shanghai Futures Exchange ended Wednesday at CNY 3,036 per tonne, down 0.46% – their sixth daily decline in a row.
Most active iron ore contract for September delivery on the Dalian Commodity Exchange ended down 0.87% at CNY 683 per tonne. Iron ore for immediate delivery into China .IO62-CNI=SI dipped 0.6% to USD 95.4 per tonne on Tuesday, the fourth daily decline in a row.
The continued downtrend reflects pessimism among market players as they feel that Chinese property market would remain sluggish, depressing demand for construction steel. The rainy season also reduces construction activity
It is learnt that government measures to support real estate sector by way of relaxing rules on purchases by non residents and providing subsidies and tax breaks have already begun in around 20 cities. But market players feel that this kind of mini stimulus measure is unlikely to trigger any lasting recovery in the steel market, which will continue to face relatively weak demand and credit restrictions over the remainder of the year.
Source – Strategic research Institute