Reuters reported that Shanghai rebar futures fell again on Wednesday reaching its lowest level in more than a week as fears about the viability of a European debt deal re-emerged, despite iron ore prices extending gains amid buying by Chinese steel mills.

The benchmark January rebar contract on the Shanghai Futures Exchange fell by around 2% to CNY 3,965 per tonne on Wednesday, lowest since October 24.

Steel demand is expected to turn increasingly tepid for the rest of this year as construction activities are slowing down in some northern regions and end users remain cash strapped.

Asian stocks wiped out all gains made during the huge relief rally last week after European leaders had agreed a basic framework to help reduce Greece huge debts and boost the region bailout fund and strengthen banks.

Mr Wu Wenan an analyst with HNA Topwin Futures in Shanghai said "Greece referendum has triggered market fears, dragging down rebar futures. He said that rebar futures may continue to fall further in the near future, as demand will weaken though steel mills are doing maintenance to reduce output."

A bunch of local traders are destocking as they have been urged to repay bank loans as the year end approaches which will further weigh on spot prices.

(Sourced from Reuters)