Steel rebar futures in China fell to CNY 3,080 per tonne from the two-month high of CNY 3,120 on October 28th amid evidence of poor demand among the world’s top consumers, weighing against recent signs of lower supply. The official construction PMI in China fell to 49.1, tying for the record low to reflect a third consecutive contraction in the sector as low purchasing power for households and government restrictions against the oversupply of housing pressed against the outlook for rebar and construction materials. Mounting trade disputes between China and other steel consumers also hurt bidding, as mills are prevented from offsetting poor domestic demand with exports. Still, the outlook of supply also remained muted to limit the pullback in ferrous metal benchmarks. Beijing recently proposed a stricter capacity swap plan that would prohibit adding new steel capacity in key areas, transferring capacity from non-key to key regions, or reallocating capacity among key zones.
