September 08, 2008

Chinese construction steel prices continue to climb up

It is reported that Construction steel price is still leading the rise in domestic steel market. They have been hitting record level again and again, bolstered by strong demand and rising input.

In Shanghai, HRB335 20mm rebar and HRB400mm 20mm rebar prices have jumped to CNY 4270 per tonne and CNY 4370 per tonne respectively. Q235 wire rod is being quoted at CNY 4280 per tonne, hi speed material at CNY 4310 per tonne up by CNY 30 per tonne to CNY 50 per tonne from last week.

Mysteel forecasts if we take HRB335 20mm rebar price as benchmark, it is expected to approach CNY 4500 per tonne on Shanghai market in a month if it exceed CNY 4300 per tonne. We believe the increase would go a long way taken into account the prosperous construction activities in both China. In addition, the rising iron ore price is always pushing up the price. There would be no great drop as long as iron ore price keep going up.

As is known to all that real estate industry is also hot in other countries. Among others, Middle East and Russia are very active since they benefit a lot from exports of high priced energy and resources, mainly crude oils. The robust demand from constructions would certainly drive up rebar and wire rod prices and the trend is likely to maintain for a long period.

Export market is still quiet and there have been less contracts being concluded due to high prices. Some traders even have already suspended their export business, saying the delivered Chinese construction steel cost is much higher than overseas destination market prices.

(Sourced from MySteel.net)