China's steel trading improves on active buying

Transaction volumes of construction steel in China's physical market improved significantly this week, thanks to the active replenishment of end-users ahead of the country's coming National Day holiday over October 1-7, Mysteel Global learned.

As of September 27, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel's regular tracking reached 276,754 tonnes/day, rising for the second day by another 47,547 t/d or 20.7% on day to record the highest daily total since September 10 2021.

Speculative demand has also improved somewhat, as sentiment in the domestic market has brightened with the strengthening prices in both the futures and physical markets, Mysteel Global noted.

For example, the most-traded rebar contract on the Shanghai Futures Exchange for delivery in January 2023 closed the daytime trading session at Yuan 3,837/tonne ($530/t) on Tuesday, higher by Yuan 86/t from the settlement price on the prior day, while the national price of HRB400E 20mm dia rebar in the spot market under Mysteel's assessment increased by Yuan 26/t on day to Yuan 4,148/t including the 13% VAT.

However, many domestic traders are still cautious about market conditions once China reopens for business after the week-long holiday, market insiders admitted, in view of the continuous recovery in steel output at a time when demand remains uncertain.

"The better performance (in steel trading) was mainly attributed to replenishment among end-users," a market source in Shanghai said. "Most traders are not active in building up their stocks for the moment," he added.

Written by Nancy Zheng, zhengmm@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.