It is reported that steel mills which earlier scaled down their prices now have started pushing them up with the rally in rebar futures market. And the future prices of steel products eyed a general rise yesterday upon the anticipation of ex works price lift by Shagang.

As per report, by now the future price has surged CNY 200 per tonne. Insiders said that the future price is getting more and more functional and its change has been well responded by steel mills move to adjust offers which in turn will promote the behavior of future prices.

A substantial fund from Zhejiang province was put to the steel future market recently beating market expectation.

On October 20th eight domestic steel mills corrected their ex works prices up. And the market expected that Shagang will lift prices November 5th though the paper has received no related information by the issuance of the report. Rebar price rise came in line with the expectation and closed at CNY 3887 per tonne a growth of CNY 40 per tonne.

Mr Weibing manager of the steel futures business department of Shenyin Wanguo Futures Ltd said "The future market and mills ex works prices are interactional."

Macquarie a well known investment bank predicted in its survey which was issued recently that, Chinese steel price will still move up by 13% by the end of this year and continue the uptrend by 12% by the end of the next year. But according to an analyst with Xinhu Futures, mills lifting prices is not good news for those who are panting for market rally, because it is self evident that the mills are less likely to reduce capacity once they can make more profit from higher prices.

(Sourced from MySteel.net)
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