The Singapore and Hong Kong rebar markets have weakened as suppliers have cut prices amid the downturn in the Chinese market, trading sources tell Kallanish. However, bearish expectations are holding back buying, they said.

Position cargoes from India and China for theoretical-weight rebar for November shipment and October shipment respectively are heard at around $530-540/tonne cfr Singapore, down from last week's market levels of $555-560/t cfr.

Certain Chinese mills are offering theoretical-weight BS 4449 500B rebar for November shipment at $550/t cfr Singapore, down $10/t from a week ago. “There are limited tonnages for relationship deals,” a trader says.

These mills are taking in orders Thursday or Friday so that they can tie in with their production schedule, he continues. But in his view, these mills could be willing to lower prices to meet traders' offers. Chinese mills were last week holding rebar offers at $560/t fob China (or around $580/t cfr Singapore).

Certain traders are taking short positions and offering material for delivery in December or first quarter 2018 at $520-530/t cfr Singapore, a trading source suggests. “There traders have a negative outlook,” he says. One trader was heard to have collected orders last week for Chinese actual-weight rebar at $535/t cfr Hong Kong. Prices had peaked in mid-September at $565-570/t cfr Hong Kong. 

But he doesn’t think that the Chinese markets will drastically fall. “Demand in China is not so bad and inventories are not going so quickly,” he says. 

A Singapore trader believes that prices would stabilise soon in the current cycle with “... the next phrase of market correction likely to occur in end-November and in December." Another says that pollution controls will support steel prices until the Lunar New Year.  "The current (physical) market is going through a correction after the adjustment in the paper market which has gone up too much," he adds.