According to the data released by MOFCOM, China's domestic construction steel price had declined by 1.1% for the week ended on June 26 compared to prior week. For instance, the price for rebar with diameter of 25mm and high speed wire rod with diameter of 6.5mm had dropped by 1.9% and 1.6% respectively week over week. And the possible reasons were shown as follows:
Firstly, for last week the market demand shrunk on aggregate due to the heavy rainfalls in south and east China, which had made the market just clench fewer transaction deals. Secondly, for last week China's iron ore price also decreased by 0.7% compared to previous week and by 4.3% vs early May, which had made a low production cost for steelmakers. The third reason was the constant steel capacity releasing from steelmakers. Accordingly, China's registered steelmakers had produced 1.6241 million t of crude steel in early June, jumping by 33000 t as compared to late May and by 2.1% on a month on month comparison basis. In addition, it was reported that Shagang Group and Rizhao Steel had pushed down their EXW prices for rebar and high speed wire rod.
In this context, China's construction steel price is anticipated to inch down in the upcoming future.