Steel rebar futures dropped to CNY 3,250 per tonne in December, the lowest level in a month, amid ongoing concerns about weak demand for ferrous metals in China.
Steel rebar futures drop in December
China reportedly raised its budget deficit target to 4% for next year to support “more proactive” fiscal stimulus measures. However, Beijing has yet to provide details on how it plans to target its stimulus, leading markets to believe it is focusing more on optics than on concrete actions. This has left investors uncertain about whether the stimulus will support debt-stricken property developers—among the world’s largest consumers of steel rebar—or limit construction activity to address concerns over housing oversupply.
Yuan devaluation may weaken the outlook
Meanwhile, speculation of a yuan devaluation has weakened the outlook for foreign steel from China, the world’s top exporter. Chinese steel exports surged to over 100 million tons in the year through November, the highest since 2016, as mills turned to foreign markets to meet sales targets.
