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Rebar prices increase strongly in China - 14 March 2012

Northern Chinese rebar prices have maintained a strong upwards trend after Hebei Iron & Steel (Hegang) raised its mid-March prices by RMB 100-150/tonne ($16-24/t) on Monday. Market sentiment has been driven by the hope that end-user demand could increase thanks to warming temperatures, as well as by higher mill prices.

In the Beijing spot market, 18-25mm diameter HRB400 rebar sourced from Hegang was offered at about RMB 4,450/t ($703/t), with 17% VAT, on Tuesday up around RMB 50/t ($8/t). Prices for Hegang sourced 18-25mm HRB335 rebar also gained RMB 50/t to approximately RMB 4,350/t. Since last Friday, Beijing spot rebar prices have increased by an accumulated RMB 120/t and already sit above Hegang’s list prices of RMB 4,300/t and RMB 4,400/t respectively for HRB335 and HRB400 rebar.

Meanwhile, futures prices have also kept increasing. On the Shanghai Futures Exchange (SHFE), the widely-traded October rebar contract price closed at RMB 4,341/t, up by 0.14% from Monday.

“People are used to buying steel when prices are picking up as they are worried they may have to pay a much higher price the next day. Price increases in Beijing starting Saturday did help stimulate sales volumes. But I’m afraid now the prices are rising too quickly as some buyers have started to take a wait-and-see mode,” a local trader said. Room for further price gains may be limited, he expects.

Chinese 18-25mm HRB400 rebar

©SBB 2012

RMB/tonne

 

Incl. 17% VAT

Excl. 17% VAT

Beijing

4,450

3,803

 

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