Steel rebar futures in China were at CNY 3,050 per tonne, trading in a tight range since hitting a seven-month low of CNY 3,017 on April 22nd, as subdued trade flows dampened the outlook for ferrous metal demand.
Steel rebar holds close to seven-month low
The latest NBS Manufacturing PMI indicated an unexpected contraction in Chinese factory activity in April, with export orders plunging to their lowest level in over two years amid escalating tariff tensions between Beijing and Washington. This deterioration in industrial sentiment has cast a shadow over the broader economic recovery, particularly in the property sector.
Weak consumer confidence and sluggish homebuyer activity have intensified concerns that property prices could continue their downward trend, further straining the already fragile balance sheets of heavily indebted real estate developers. The ongoing financial instability in the sector raises the risk of large-scale developer defaults or liquidations, which could significantly erode domestic demand for steel rebar — a key material in residential construction.
Crude steel production in China increased
Compounding the bearish outlook, crude steel production in China increased by 3.6% year-on-year to 93 million tons in March, despite earlier pledges from Beijing to curb excess capacity and rein in pollution. The supply-side pressure added to the oversupplied market, weighing further on prices. Nevertheless, ferrous metals such as rebar have managed to outperform base metals in recent sessions, supported by hopes that forthcoming stimulus measures will prioritize infrastructure and housing support. Notably, the construction sub-index of the PMI remained in expansion territory, providing a glimmer of resilience in an otherwise faltering industrial landscape.
