Prices for rebar construction steel in China extended losses into a fourth session on Monday, with the market waiting to see if output curbs due to end soon could be prolonged as the government continues to battle pollution.
Benchmark Shanghai rebar prices fell 2.1 percent to 4,204 yuan ($611.58) a tonne when market closed at GMT 0700.
“Steel prices have certainly been supported by production restrictions amid the anti-pollution campaign. But the impact of previous measures has already been digested by the market, and investors are waiting to see if there are any further moves,” said a Shanghai-based steel trader. He declined to be identified as he was not authorised to speak with media.
A rally in Chinese steel prices over the last two weeks has partly been driven by expectations that production restrictions due to expire on Friday in the top steelmaking city of Tangshan in Hebei province could be extended.
The local government has not made any official comment on the issue.
“Utilisation rates at steel mills across the country could climb to around 70 percent if operations resume in Tangshan,” analysts from Huatai Futures wrote in a note.
Weekly utilisation rates were at 66.44 percent last week, according to data from Mysteel consultancy.
“But it is still uncertain if Tangshan will ease the restrictions, since air quality in the city has not seen clear improvement.”
Steelmaking raw materials mostly fell alongside rebar prices on Monday, with many traders staying on the sidelines until the outlook for steel production becomes clearer.
The most-active iron ore futures on the Dalian Commodity Exchange dipped as much as 2.7 percent to 476.5 yuan a tonne, their lowest in a month. It closed down 2.2 percent at 479 yuan.
Dalian Coking coal prices dropped 2.1 percent to 1,262 yuan a tonne.
Coke futures for January delivery edged up 0.1 percent to 2,517 yuan a tonne, buoyed by environmental inspections in major coke producing hubs in Shanxi and Shaanxi provinces