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Chinese real estate threatens construction steel market
Contact nowChina Business News reported that poor selling in
According to the trader, the construction sites are slow paying back the money for buying steel products, often in 20 to 30 days after the delivery and they replace cash with commercial note.
Mr Zhu manager with Shunchao Steel a Shanghai based trading company said that the second grade rebar, most commonly used in construction, was posted below CNY 4300 per tonne at the year start, and then surged CNY 5600 per tonne by end May and early June.
He said that "Now the second grade is about CNY 5200 per tonne the lowest hit some CNY 5100 per tonne by end June and early July but the steelmakers' prices are not that low and we are often selling the products CNY 20 per tonne cheaper than we buy in."
Mr Zhu said the present pricing power remains in the steelmakers' hand, who only ensure a certain volume of the not high value added products; coupled with fine export situation, producers' ex-works price for the traders haven't been cut down.
On the other hand, the traders are faced with financial stress also because of slow payback of the real estate developers. They are thus worried and hope to sell more products, dragging down the construction steel price or even leading to losses.
According to another
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