Rebar Tumbles to Eight-Month Low on Chinese Overcapacity ConcernBloomberg News
Steel reinforcement-bar futures fell to the lowest level in more than eight months on concern that overcapacity at Chinese mills means supply will exceed demand.
Rebar for October delivery on the Shanghai Futures Exchange closed at 3,438 yuan ($561) a metric ton today, the lowest close for the most-actively traded contract since Sept. 7. Futures have retreated 4.5 percent in May and are heading for a fourth monthly decline.
China’s steel output rose by 20.09 million tons in the first four months of this year, Wang Xiaoqi, deputy head of China Iron and Steel Association, said in conference in Shanghai yesterday. About 54 percent of that additional output has become inventory sitting in warehouses, Wang said.
“The rebar market seems to be on track to decline further as prices breached a series of lows in the past few sessions while investors added to their short positions,” Zheng Ge, an analyst at Wanda Futures Co., said by phone from Beijing. Lower iron ore prices also contributed to rebar’s fall, Zheng said.
Iron ore for immediate delivery at the Tianjin port in China fell 4.2 percent to $112.90 a dry ton yesterday, according to the Steel Index Ltd.
The average spot price for rebar fell 0.3 percent to 3,483 yuan a ton today, the lowest since September 14, according to data from Beijing Antaike Information Development Co.
— With assistance by Feiwen Rong