Steel rebar futures have climbed to CNY 3,170 per tonne in Stember, marking a one-month high as market participants evaluate the potential effects of new fiscal measures on demand.
Following a crucial Politburo meeting, China revealed forthcoming fiscal stimulus aimed at revitalizing the struggling housing sector. This initiative stands as one of the clearest actions from the government to bolster the economy, emphasizing officials' commitment to stimulating growth and enhancing the outlook for steel demand in manufacturing applications.
The anticipated measures are also expected to provide support for debt-laden property developers, who rank among the top consumers of steel rebar worldwide. However, the Chinese government's efforts to curb new construction in order to mitigate housing oversupply has somewhat diminished the outlook for ferrous metals.
In parallel, the People's Bank of China (PBoC) has implemented an aggressive suite of monetary stimuli this week, including interest rate cuts, reduced reserve ratios, and provisions to facilitate more favorable mortgage refinancing.
Since the start of 2024, steel has seen a decline of 757 Yuan/MT, or approximately 19.27%, based on trading of a contract for difference (CFD) that tracks the commodity's benchmark market. Analysts predict that steel prices will settle at 3,089.00 Yuan/MT by the end of this quarter, with an expectation of further decrease to 2,949.41 Yuan/MT in the next twelve months.