Dip in Demand Epitomizes Sluggish Prices of Global Steel Rebar
- 31-May-2022 4:28 PM
- Journalist: Henry Locke
As per our sources, Steel Rebar prices fell globally in the last week of May due to increased geopolitical tensions, supply-chain disruptions, rising inflationary pressures, and the COVID-19 situation in China. International trade activity decreased as inflationary pressures remained high, as showcased by the growing average purchase prices and output rates. According to market participants, stretched global supply chains led to inflationary price pressure, with seller lead times increasing to near-record levels.
Global Steel Rebar prices prevailed under pressure from two primary sources: the Russia-Ukraine war and its repercussions, particularly on raw materials and logistics, and the wildly rising COVID-19 cases in China, which have gone on to impact both supply and demand-side movements. With the limited transactions and the global dull-market dynamics, market participants adopted a wait-and-watch outlook for trends in Steel Rebar prices, with a reported softening in global raw material prices after the initial shock.
In China, production activity contracted at a slower pace in mid-May as many of the country's tightest COVID-19 restrictions began rising gradually in some areas, implying the worst of the current economic recession is nearing an end. Chinese rebar prices have risen in the last 14 months as the government continues implementing stimulus measures. As production began to fall, Chinese rebar prices fell roughly 6% deeper amid lacklustre demand. Export prices were also lacking support. However, as Shanghai accelerates its return to normalcy, domestic Steel Rebar prices will rise. China's domestic Steel Rebar costs continued to increase on Monday, May 30, after Chinese authorities in Shanghai signalled a quicker return to typical logistics, production, and business activity following recent lockdown measures.
In Russia, the domestic Steel Rebar prices continued to fall by roughly 10% due to the oversupply from the domestic mills that are unable to export due to sanctions imposed by Western countries following the country's invasion of Ukraine. According to our sources, the buyers in Singapore have backed off on their Steel Rebar bookings after dropping offers. Rebar import costs in Singapore continued to weaken in the week ended Monday, May 30, amid thin trading; buyers mainly held back from procuring cargoes due to the quickly-falling offers.
As per ChemAnalyst, " The Steel Rebar prices are anticipated to decline further owing to the limited trading activities and production rates." With limited transactions and dull market dynamics, market participants are adopting a wait-and-watch approach for the Steel Rebar price trend.