Steel rebar prices in China dropped more than 2% to end 2016, reversing previous gains made earlier in the final week of the year.
According to a report from Reuters, coke and coking coal also remainder under pressure due in part to concerns about slowing demand from volatile trading that typically takes place at the end of the year.
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“The pullback shows traders are not confident about the steel market and future demand during the winter,” Wang Yilin, steel analyst at Sinosteel Futures, told Reuters.
For the week leading up to the New Year, steel prices have been seesawing back and forth due to low turnover from major international exchanges having the ‘Closed’ sign up for the holiday season.
It’s also important to note, cites Reuters, that steel mills usually curb output in a slow construction period, which is typically the case during the winter months ahead of the Chinese Lunar New Year holiday.
2017: the Year of Steel?
Our own Raul de Frutos recently covered the top 3 reasons why steel prices will rise in the next year. He cites a Trump presidency and investors betting on steel companies, as well as rising Chinese steel prices and an overall industry metals boom as those reasons.
“We are witnessing powerful moves across the board. Even copper, a metal whose fundamentals didn’t look appealing, recently rose near 20% in a matter of days. The bullish sentiment across base metals is another reason the expect a rebound in steel prices,” de Frutos wrote.
How will steel and base metals fare for the remainder of 2016 and into 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: