The Chinese domestic levels has been giving a rock steady performance over the last week. Although the rally might not be meteoric it seems to there to stay.
Ironically the three major propelling factors for this hike might itself proof to be the nemesis with vanishing act:
1. Curtailed production due to emission regulations
2. Hike in iron ore prices
3. Ameliorated demand for construction in Northern China
It learnt that the state in its endeavour to curtail inflation would bring in more austerity measures by hiking the interest rate and CRR.
Retarded construction in northern China hit by a cold wave could slow the demand.
Iron ore prices rose 8% in the September November period likely to surpass the highest levels of USD 177 per tonne CNF will keep the pressure up.
At the same time steel mills are keen to resume operations after Beijing announced this year''s energy savings target had been met.
Ambivalence seems to be prevalent with most of the major mills opting for rollover in December.
Shagang, China''s top privately owned steelmaker, said on Wednesday it would keep rebar booking prices unchanged in early December, while Shougang, a major state owned mill had earlier cut December rebar price by CNY 25 per tonne, leading to more cautious sentiment toward the market.