Posted on 12 Jan 2015
Chinese rebar futures fell for the fourth straight session on Monday as demand slowed in the world's top producer, further dragging down the steelmaking raw material that has been weighed down by growing supply.
Slowing construction activities in northern China due to cold temperature have cut demand for steel products, while persistently tight liquidity in the new year has constrained traders' restocking.
"Traders are reluctant to restock as steel demand is weakening and their cash flow remains extremely tight around this time, when banks urge loan repayments but keep cutting new credit lines," said Xia Junyan, an analyst with Everbright Futures in Shanghai.
The most active rebar futures on the Shanghai Futures Exchange fell 1.6 percent to 2,524 yuan ($407) a tonne by the midday break.
Iron ore inventories have fallen below 100 million tonnes since mid-December, reaching 97.51 million tonnes last week, according to data from industry consultancy Umetal.
"Iron ore inventories have eased from the peak levels, but this has been offset by falling steel prices and miners' ongoing expansion plans," Xia added.
Iron ore futures on the Dalian Commodity Exchange sagged 1.2 percent to 504 yuan a tonne.
Benchmark 62 percent grade iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI fell for the third consecutive session below $70 to $69.8 a tonne on Friday, according to The Steel Index.
