During the given week, ex-China rebar offer prices have edged down compared to the previous week, but, as China has announced its intention to cut the hidden debts of local governments, the outlook is from stable to positive.
Ex-China rebar offer prices have been heard at $490-510/mt FOB, for January shipment, moving down by $10/mt on average compared to November 1. During the given week, rebar prices in the Chinese domestic market have edged down slightly, also impacting the export market, but expectations have been rather positive.
On November 8, Lan Fo’an, China’s finance minister, stated at a press conference that China will add RMB 6 trillion ($0.84 trillion) to refinance local government debts up to the end of 2026. The minister said that the hidden debts of local governments are expected to be cut dramatically from RMB 14.3 trillion ($2 trillion) in late 2023 to RMB 2.3 trillion ($321 billion) by the end of 2028.
Also, the limit for issuance of special bonds for local governments will increase from RMB 29.52 trillion ($4.1 trillion) to RMB 35.52 trillion ($5 trillion), which will release potential consumption. Some local government funds could be used in promoting development and improving people’s livelihoods, which will promote stable economic growth and structural adjustment.
However, no further stimuli for the real estate industry have been issued, exerting a negative impact on market sentiments to a certain degree. It is thought that rebar prices in the Chinese domestic market will likely edge up slightly in the coming week.
In Singapore, the import offer prices of ex-Malaysia rebar have been heard at $520/mt CFR, on theoretical weight, remaining stable compared to the previous week.
In Hong Kong, the offer prices of ex-Malaysia rebar have been heard at $530-535/mt CFR, on actual weight, while ex-China rebar has been assessed at $530-540/mt CFR.
Average rebar spot prices in China have lost RMB 23/mt ($3.2/mt) compared to November 1, standing at RMB 3,570/mt ($500/mt) ex-warehouse, according to SteelOrbis’ information.
As of November 8, rebar futures at Shanghai Futures Exchange are standing at RMB 3,367/mt ($475/mt), decreasing by RMB 26/mt ($2.4/mt) or 0.8 percent since November 1, while down 0.94 percent compared to the previous trading day, November 7.
$1 = RMB 7.1433
