Shanghai rebar prices rise for 3rd day on demand hopes, pollution crackdown

China’s construction steel rebar prices gained for a third consecutive session on Wednesday, amid expectations of higher demand and lower supplies following the country’s crackdown on pollution.

The most active rebar on the Shanghai Futures Exchange gained 0.37 percent to 4,017 yuan ($592.18) a ton during the afternoon trading session.

On Tuesday, the market hit a high of 4,033 yuan a ton, its strongest since early September 2017.

“Steel demand had come down a little because of the rain, but I think we should see recovery in demand as the summer rain has died down,” said Cao Ying, an analyst at SDIC Essence Futures.

“At the same time, we have lower production due to the pollution crackdown, so Shanghai futures are going up.”

China’s environmental ministry said on Monday it had extended monthly air quality rankings to 169 cities from 74, in order to add pressure on local authorities as it intensifies its campaign against air pollution.

The top steelmaking city of Tangshan in North China’s Hebei Province was in June named as the worst place for air quality in the new list of 169 cities.

Tangshan ordered steel mills to start six weeks of production cuts from Friday.

Stockpiles of steel products rose by 29,500 tons to nearly 10 million tons on Friday from the week before, according to Mysteel data, indicating a tepid demand in the summer season.

Steelmaking raw materials rose with strong gains in coking coal, which jumped 2.9 percent to 1,203 yuan a ton.

Iron ore increased 0.4 percent to 477 yuan a ton and coke rose 1.4 percent to 2,136 yuan a ton.