Chinese steel market is all guns blazing with unimpeded escalation in price. In its inimitable style prices spike has been as mercurial as hard was the fall. Shanghai rebar’s future hit one-month highs on Wednesday by 1.6 percent at touching CNY 3638 per tonne (USD 580 per tonne).
Even though fireworks were lit by infrastructure stimulus of USD 150 billion and QE3 in USA it rages with the approaching National Holidays as buyers make beeline for stocking. Recent QE by the Japanese bank has added to the excitement.
Lurking fear of unsustainability refuses to recede with the core demand fundamentals remaining weak. Infrastructural projects will take time to shower benefit on the economy. At the same time mills have already ramped up production in anticipation of better demand and buying. Daily crude steel production picked up by 1.27% in the 1st 10 days of September at 1.895 million tonne per day over preceding 10 days.
CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index
Source - Strategic Research Institute