Steel prices in China fell to a more than three-month low on Wednesday, hurt by poor demand due to a weak construction sector in the world’s biggest consumer of the metal alloy.
Rebar on the Shanghai Futures Exchange (SHFE) fell as much as 0.8% to 3,483 yuan ($478.73) a metric ton, the lowest since April 8.
The contract was down 0.7% by the midday break.
Latest data from China showed domestic demand continued to recover at a slow pace, and construction data showed double digit percentage fall in the first five months of the year.
SHFE hot-rolled coil steel dropped to as low as 3,687 yuan a ton, a level unseen since April 8.
It was down 0.5% at 3,688 yuan at the midday break. SHFE wire rod steel shed 0.7% to 3,665 yuan a ton and stainless steel dropped 1.2% to 13,955 yuan.
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The most-traded September iron ore on China’s Dalian Commodity Exchange (DCE) declined 1.2% to 818.50 yuan a ton, while benchmark August iron ore contract on the Singapore Exchange dropped 2.3% to $106.90 a ton by 0439 GMT.
DCE coking coal fell 2.7% at 1,520 yuan a ton, and coke declined 1.3% to 2,209 yuan. However, the price decline is seen limited.
“Although demand has been weak, it’s not like it has evaporated completely.
So …any fall in prices will not be overly dramatic especially given that a lot of the negativity has been priced,“ said a trader.
The supportive levels for SHFE rebar contract is around 3,360 yuan and for hot-rolled coil contract is 3,600 yuan, the trader said.
Markets participants have been eyeing China’s key political meeting next week as they hope for supportive policies to boost demand of steel.
“There might be some talks of boosting economy etc., but I think what market is looking for are details,” said the trader.
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