Singapore — Chinese steel markets fell Monday, finding no immediate support from the central bank's fourth interest rate cut since November.
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Steel futures in Shanghai also closed lower.
Spot prices of 18-25 mm diameter HRB400 rebar in Beijing fell Yuan 5/mt ($0.81/mt) to be assessed at Yuan 2,105-2,115/mt ex-stock actual weight basis, including 17% VAT.
In Shanghai, offers for same specification rebar fell Yuan 10/mt to Yuan 1,960/mt ex-stock on a theoretical weight basis and including value-added tax.
"I don't think the rate cuts will help steel markets at all, and as long as mills resist production cuts, steel prices will continue to fall," said a Shanghai-based trader.
In the hot rolled coil market in Shanghai, Q235 5.5 mm thick coil was assessed Yuan 15/mt lower at Yuan 2,230-2,250/mt ex-stock.
A trader in Beijing said that while the latest bank reserve ratio requirement cut would release several hundred billion yuan in liquidity, he doubted it would be channeled to the steel or downstream manufacturing sectors.
Capital released through earlier rate and reserve ratio cuts flowed mainly into equity markets, steel traders said.
The Shanghai Composite Index fell 3.34% Monday, and was down 22% from its early June peak.
On the Shanghai Futures Exchange, the most active October rebar futures fell 1.5% to close at Yuan 2,181/mt.
The October HRC contract dipped 0.8% to Yuan 2,269/mt.
However, one trader in Lecong in southern Guangdong province said the bank's move could provide a boost to steel prices over the next two weeks.