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Construction|Infrastructure|Iron Ore|Manufacturing|Projects|Steel|Manufacturing |Environmental|Infrastructure
Construction|Infrastructure|Iron Ore|Manufacturing|Projects|Steel|Manufacturing |Environmental|Infrastructure
construction|infrastructure|iron-ore|manufacturing|projects|steel|manufacturing-industry-term|environmental|infrastructure

Shanghai rebar extends rally as steel margins recover

18th November 2019

By: Reuters

  

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Rebar futures in China rose for a fifth consecutive session on Monday amid improving steel margins in the world's top producer of the construction and manufacturing material.

The Shanghai Futures Exchange's most-traded contract for the construction material, for delivery in January 2020, ended 0.6% higher at 3,556 yuan ($508.43) a tonne, after climbing to 3,576 yuan earlier in the session, its strongest since Sept. 30.

"Steel margins remain on the upward trend and as it stands we are back to early May levels," said Hui Heng Tan, research analyst at commodity broker Marex Spectron.

Margins have improved in the wake of declines in prices of feedstocks such as iron ore and coke. Spot prices of benchmark 62% iron ore slumped below $80 a tonne last week, their lowest in more than nine months, amid tepid demand and easing concerns over supply.

Steel rates rebounded slightly after the sharp drop early this month as a result of the spate of environmental restrictions in China, Tan added.

Rebar inventory in China slid last week to the lowest in 10 months, based on data tracked by SteelHome consultancy.

Supporting the rebound in rebar prices, Tan said the latest construction data out of China was above Marex expectations. "We are now positive on downstream construction activities," he said.

Further pollution-related curbs on some steel mills and demand-boosting raft of stimulus measures to shore up China's slowing economy also helped lift steel prices.

China will lower the minimum capital ratio requirement for some infrastructure investment projects, state television CCTV reported last week, citing a cabinet meeting chaired by premier Li Keqiang.

In a sign that China's central bank will trim its new benchmark loan prime rate to further prop up the economy, it unexpectedly trimmed a closely watched lending rate on Monday, the first such cut in more than four years.

Edited by Reuters

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