Shanghai Securities News reported that rebar prices advance successively steel users begin to worry about the supply. The demand of rebar in spot market has been driven into an unparalleled level by the lately started large infrastructural constructions and the improving operations in real estate sector. And some small steel user worries about the short of rebar supply in Q3 midseason of constructions.
Under this situation, some small steel users turn to futures market to ensure the purchasing. As learned the number of registered cargoes gradually increases and the rebar stocks of Shanghai Futures Exchange firstly outnumber 10,000 tonnes this week. Small users tend to deal with future delivery since the minimum tonnage in the delivery is only at 300 tonnes fit for small trades.
Prices for the futures contracts in Shanghai Futures Exchange all went up recently that for dominant contracts continued to break down records this week. The survey shows that spot prices for main rebar are traded at CNY 4093 per tonne to CNY 4456 per tonne and the average prices for futures delivery are at CNY 4100 per tonne to CNY 4269 per tonne. To sum up rebar prices are expected to head up both in spot and futures markets.
Mr Xiong Zheng GM of Shanghai subsidiary of Soochow Securities said “Rebar prices bubbles up mainly due to the hot downstream demand.” Government huge investments have brought in lots of demand of rebar which fears small users that they will be hard to let in rebar in the incoming midseason.
Many small traders support the thought of buying future contract, when mills always give priorities to large steel consumers. Mr Wei Bin director of steel department of Shenyin Wanguo Future said “It’s feasible for them to absorb products from futures market.” If small agents want successful futures delivery there must be cargos in the depot and the depot should not be far from the agents.
At present, the total storage capacity of rebar referred to Shanghai Futures Exchange is at 3 million tonnes including 0.54 million tonnes in Shanghai, 1.47 million tonnes in Jiangsu, 0.39 million tonnes in Zhejiang, 0.6 million tonnes in Tianjin. However the registered cargos are a bit few at present. Expert said that it needs more mills and traders to take part in the businesses.