Rebar futures fell again yesterday:
I see no reason why they should stabilise yet. If domestic steel demand is weak, cheaper prices will be needed to increase export volumes.
Iron ore continues to fall as well, hitting new lows on the Dalian bourse overnight:
It is interesting to note that night trading in conjunction with DM markets is leading the price trend again, just as it did during the big NY bounce. This suggests CTAs and other speculators are playing some role.
But neither is there much reason for iron ore to stop falling yet. The newsflow remains terrible:
China’s struggling real estate developers won’t be getting a major bailout, Chinese authorities have indicated, warning that those who “harm the interests of the masses” will be punished.
“For real estate companies that are seriously insolvent and have lost the ability to operate, those that must go bankrupt should go bankrupt, or be restructured, in accordance with the law and market principles,” Ni Hong, Minister of Housing and Urban-Rural Development, said at a press conference Saturday.
“Those who commit acts that harm the interests of the masses will be resolutely investigated and punished in accordance with the law,” he said. “They will be made to pay the due price.”
That’s according to a CNBC translation of his Mandarin-language remarks published in an official transcript of the press conference, held alongside China’s annual parliamentary meetings.
And the correction hasn’t even started yet. This Capital Economics poddy is excellent:
Here is what they are talking about:
Iron ore $20 is coming.
