According to Mr Lu Zhangfu GM of Zhejiang Fuchang Steel Materials Co Ltd "There will be thin room for further rebar price declines, though the downtrend would continue, dealing panic to traders."
And Mr Lu attributed the continuous price falls to the rising stockpiles and flat demand. Stocks in Hangzhou added by 30,000 tonnes to 50,000 tonnes during the national day holiday and amounted to a historical high of over 5 million tonne by now.
Mr Lu said "Demand is still there, but the problem is the rising magnitude of stocks has far outstripped that of demand growth. And steel mills have no idea of cutting output since profit stays. He said that some non-construction steel producers also shifted to rebar production. And they will not trim output voluntarily until after market prices fall below their costs line.”
Mr Lu expected that however, the downward room will also be slim in the last few months along with the releasing down stream demand and falling stocks. And price might tend stable by then.
Construction steel market kept falling in Hangzhou after the 8 day national holiday, sending current rebar prices to CNY 3,350 per tonne to CNY 3,400 per tonne off some CNY 100 per tonne from late September.