Marty Melville / AFP / Getty ImagesChinese steel and bulk commodity futures remain under pressure on Thursday, extending the selloff that began earlier in the week.
Here’s the scorecard as at 4pm in Sydney.
SHFE Rebar ¥3,894 , -1.57%
DCE Iron Ore ¥516.50 , -3.37%
DCE Coking Coal ¥1,312.00 , -3.42%
DCE Coke ¥2,077.50 , -4.81%
It’s another seas of red with continued weakness in rebar futures continuing to drag iron ore, coke and coking coal contracts lower as a consequence.
While profit-taking may be behind the move — the May 2018 rebar contract rallied 22% between early October and early December — others believe more fundamental factors may explain the recent bout of weakness.
“Spot steel prices hit a multi-year high (on Tuesday), and traders are clearing their stocks to lock-in profit amid worries that the turning point may come soon as demand will drop off seasonally,” an analyst with a trading firm in Shanghai told Reuters.
“The physical market starts weakening today.”
Reuters says a warmer-than-usual start to winter in China helped to boost demand from the construction sector, tightening spot steel markets leading to recent price gains.
On Wednesday, the price for benchmark 62% iron ore fines tumbled 3.4% to $69.36 a tonne, according to Metal Bulletin, its largest one-day percentage decline since September 22.
It was also the first time since mid-November that back-to-back declines have been reported.
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