Steel rebar futures were at the CNY 3,750 per tonne mark on Monday, the lowest in three weeks and not far from the 20-month low of CNY 3,715 hit on July 18 as Chinese President Xi Jiping re-emphasized the importance of the country’s zero-Covid policy during his speech at the Congress of the Communist Party, further prolonging uncertainty that a breakout of cases could halt economic activity in major cities.
Covid detections have risen to levels last seen in August after China’s week-long national holiday, causing governments to ramp up testing in major cities. In addition to lockdown jitters, demand expectations for industrial and construction inputs remain poor amid the concerning macroeconomic backdrop.
China’s usual construction boom in September and October has not spurred a significant increase in buying activity for steel, as real estate developers saw new-home sales plunge during the end of Q3 and PMI data continuously shows contractionary activity.
