Shanghai rebar futures fell for a second session on Tuesday as rising inventories of the construction steel product in China suggested softer demand in the world’s top consumer.
Stocks of rebar at Chinese traders rose about 29,000 to 4.72 million tonnes on Friday, increasing after a 14-week decline, data collected by SteelHome consultancy showed.
A similar gauge of rebar inventories by Mysteel consultancy showed they have risen for a second straight week last week following a 14-week drop.
The most-traded October rebar contract on the Shanghai Futures Exchange closed down 0.6 percent at 3,753 yuan ($562) a tonne.
Hot weather in China’s northern region and rains in the eastern and southern areas have curbed construction activity, and with it demand for steel, during a typically weak season for consumption, traders said.
The prices of rebar and steelmaking raw materials iron ore and coking coal all slid on Monday following data showing growth in China’s manufacturing sector cooled in June.
The slower manufacturing growth reflected a decline in export orders amid a widening trade dispute between China and the United States.
“Looking ahead, new export orders may continue to worsen as the trade escalation has no signs of abating, which will eventually weigh on China’s overall manufacturing activities,” said analyst Helen Lau at Argonaut Securities.
“In view of this outlook, we expect China’s government to dole out more monetary easing and stimulus measures to protect economic growth,” said Lau, adding she continues to prefer the steel sector as China’s supply-side reform will help counter the economic headwinds.
Coke on the Dalian Commodity Exchange fell 1.5 percent to 2,036 yuan a tonne and coking coal dropped 1 percent to 1,165 yuan.
Iron ore eased 0.4 percent to 463 yuan.
Spot iron ore for delivery to China’s Qingdao port slipped 0.7 percent to $64.54 a tonne on Monday, according to Metal Bulletin.
Source: ReutersPrevious Next