On Thursday 29th December 2016, Chinese steel rebar prices fell more than 2 percent, reversing positive gains made on Wednesday of the same week. The markets turned fearful over end of year volatility resulting in weak demand.
"The pullback shows traders are not confident about the steel market and future demand during the winter," said Wang Yilin, steel analyst at Sinosteel Futures.
The most-active rebar contract for May delivery on the Shanghai Futures Exchange settled down 2.0 percent at 2,951 yuan ($424.35) per ton.
Prices for the entire week have been swapping and changing daily, due to low turnover because of seasonal holidays in a number of the world’s countries that play host to major international exchanges.
Iron ore on the Dalian Commodity Exchange rose 0.1 percent to settle at 564.5 yuan a ton.
Steel mills regularly curb their production levels at this time of year as it’s historically the winter months which are the quietest; production levels also drop in preparation for the Chinese New Year which will see China shut down for their national festivities.
Factory closures due to widespread pollution across northern China last week renewed concerns that consumption of raw materials like iron ore and coking coal may fall harder than is usual for this time of year.
The most-active coking coal futures on the Dalian Commodity Exchange were down 1.7 percent at 1,163 yuan per ton, after falling to the lowest since Oct. 18 on Tuesday.
Coke fell 2 percent to 1,535 yuan per ton. On Tuesday, prices hit their weakest since Nov. 3.