MANILA, June 3 (Reuters) - Rebar steel futures in China jumped to their highest in more than nine years on Wednesday, buoyed by strong spot steel demand and prices, and falling domestic inventory of the construction material.
The Shanghai Futures Exchange’s (ShFE) most-traded October rebar contract rose as much as 1.5% to 3,663 yuan ($515.97) a tonne, its strongest since February 2011.
Rebar stockpiles in China were estimated to have fallen by 40% since mid-March, indicating a solid recovery in demand, after the world’s second-largest economy eased its coronavirus-fuelled lockdown restrictions, based on SteelHome consultancy data. SH-TOT-RBARINV
Construction is leading a gradual recovery of China’s economy, helping improved steel profit margins and encouraging mills to ramp up output.
“We continue to be bullish on short-term demand,” said Hui Heng Tan, a Singapore-based analyst at Marex Spectron.
Strong spot steel demand in China is expected to continue, “as our forward demand indicator too reflects conditions to remain firm in the next 2-3 weeks”, he said in a note.
Marex Spectron is also bullish on its assessment of short-term macroeconomic conditions in China, he said, citing looser credit conditions in particular.
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