Fastener Shanghai
Official WeChat
fastenerfastenerBuyers' Guidefastener
fastenerStandard Searchfastener
fastenerFor Buyersfastener
fastenerFor Suppliersfastener
fastenerTrade Showsfastener
fastenerMy Officefastener
fastenerPost Inquiriesfastener
Home->Fastener News->Steel Prices Fall after Spiking to Record HighsYou are the 619587 visitors
Views:1195   |   recommendation:   |   Votes:0   |   Discuss:0
Steel Prices Fall after Spiking to Record Highs

Talk about a roller coaster. Chinese steel prices are falling this week after spiking to record highs last week as a series of curbs targeting speculative trading kick in.

Starting Tuesday, one of China's biggest commodities derivatives markets is raising transaction fees to 0.05 percent of the total value, from 0.01 percent, on steel rebar futures contracts for delivery in October 2017 and January 2018. The Shanghai Futures Exchange is also limiting intraday positions on those contracts to 8,000 lots.

The October 2017 contract has slipped a bit over 2 percent so far this week to 3,880 yuan per metric ton, but remains up 35 percent for the year.

Chinese steel has rallied steadily this year, but high trading volume and a recent price surge has worried authorities. Increased oversight on the metal underscores Beijing's priority to maintain market stability in a sensitive political year, and its continued efforts to iron out the country's history of boom-and-bust cycles in commodities trading. China is both the world's largest producer and consumer of steel, so price fluctuations can hit the world's second-largest economy on all sides.

All of this "will continue to affect market sentiment this week, as the commodities market is mostly policy driven," wrote UOB Kay Hian analyst Sandra Huang in a research note. "We think the government is targeting to curb speculative trading in the futures market, rather than in the spot and stock markets."

The scrutiny on commodities is not going away. The Shanghai Stock Exchange has formally asked companies including Anyang Iron and Steel and Fangda Coal for comments on steel prices, the impact of cuts to capacity and production, and clarity regarding company profitability, according to filings. Earlier this month, official state media said the Shanghai exchange would strengthen its oversight of any corporate actions and issues that may pose financial risks to the market.

On Friday, the China Iron and Steel Industry Association said in a strong statement that the jump in steel futures was driven by speculation over the impact of coming capacity cuts, not fundamentals. It also said it had convened meetings with industry to analyze the "abnormal" price fluctuations.

Beijing is aiming to cut steel capacity by up to 150 metric tons by 2020, and major rust belt provinces are meant to scale back production this winter in efforts to lower air pollution. Analysts said last week that recently announced targets related to those cuts had contributed to the surge in pricing.

But given the series of curbs introduced over the last few days, analysts said they expect more action to come from authorities and for the current pricing downtrend to continue in steel, impacting other commodities.

"Basically, retail traders in China have taken this to mean the highs have been seen," said Chris Weston, chief market strategist at IG. "Clearly, there has been a liquidation of long positions from the bulls ... I would be cautious here and be keeping a firm eye on iron ore futures as the selling could accelerate."

The September 2017 iron ore contract traded on the Dalian Commodity Exchange is trading 4 percent lower so far this week.

Source: CNBC

2018/11/29 17:24:00

Previous:    NORMA Group with strong organic sales growth in the first nine months of 2018
        Next:    Dongtai Huawei to Exhibit at Vietnam International Exhibition on Hardware & Hand Tools 2018

Recent Related News
Taiwan's CSC to increase prices of most steel products in Q2--2019-03-13
Japanese KOBELCO to Increase 30% of Wire Capacity in China--2019-02-12
Steel sector to remain resilient in 2019, says expert--2019-01-16
U.S Steel Importers Raise Concerns About Unpredictable Tariff Enforcement--2019-01-04
Despite rising costs, Taiwan's CSC cuts domestic steel prices--2018-12-04
Iron and steel sector gains strength--2018-11-06
Steel industry fortunes revive as product prices gain traction--2018-10-18
Hebei puts cap on steel capacity to fight pollution--2018-09-03
Steel sector makes headway in capacity reduction--2018-07-30
Specter Of Trade War After US tariffs On EU, Mexico, Canada--2018-06-04
China's steel prices recover on rising demand--2018-05-23
Lower steel price weighs upon steel plants Q1 profit--2018-05-03

Vote for this news?

fastener(Very Good)
fastener(Very Bad)

More Discuss...
Your Name: Anonymous

Enter the code shown:fastener3fastener

Fastener Trade Show Suzhou

China Fastener Directory
Get it FREE!
Get your CFD at the following shows:

•METALTECH, May 15-18, 2019, Malaysia

•IT BY FERROFORMA, Jun 4-6, 2019, Bilbao, Spain

•Fastener Fair Mexico, Jun 19-20, 2019, Mexico City, Mexico

Show Room

Offer Product

Latest News
• Taiwan Fastener Export Volume Grows 0.37% to 0.131 Million Tons in April 2019

• Malaysia’s Largest Machine Tools Exhibition, METALTECH 2019, Celebrates 25th Anniversary And New High-Tech Venue MITEC

Buyers' Guide
Company News

• Dongguan STL: Practice Brand Concept By Setting up Fatigue Test Center

• YuYao No. 2 Standard Fastener/YuYao Biaoer: A Reliable Partner For Eyebolts

The Way to Enter Chinese Market
The Way to Enter Chinese Market