Steel rebar futures in China climbed back above CNY 3,000 per tonne, rebounding from the one-year low of CNY 2,085 hit on August 3rd. The recovery tracked gains in other ferrous metals amid a temporary decline in iron ore supply to Chinese blast furnaces. The disruption followed an escalation of strike action at BHP’s Port Hedland iron ore operations, where more workers joined the work stoppage. The partial suspension of activity at the world’s largest iron ore export hub has added to risks surrounding Sino-Australian trade, deepening tensions with China’s state-backed commodity purchasing authority.
Nevertheless, subdued demand has kept steel prices lower on a year-to-date basis. Recent data underscored the persistence of China’s property crisis, signaling that rebar demand from this key sector will likely remain weak. The official construction PMI fell to a record low of 47 in July, while construction starts plunged 23.4% year-on-year in June.
Export opportunities for Chinese mills have also been constrained by protectionist measures in overseas markets targeting China’s large steelmaking capacity. As a result, China’s exports of steel and iron products fell 4.4% by volume in the year to July.
