Shanghai rebar prices fall on fresh trade tensions

China’s construction steel rebar prices dipped on Tuesday amid a broad selloff across commodities, as market sentiment was dampened by a fresh round of the Sino-US trade friction.

According to a Bloomberg report, the US is preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between the leaders of two countries fail to ease the trade war.

Investors also worried that a more lenient environmental policy in China will lead to a rampup of steel output this winter.

East China’s Shandong Province said it plans to allow local authorities in seven cities to determine the length of their output restrictions on industry from mid-November to mid-March, but the cuts must cover at least two months and include December and January. Also, a total of 11 cities in three Central provinces, known as the Fenwei Plain, will introduce production restrictions during the winter season. However, no detailed plan to cut output has been released so far.

“Several regions have published their production restrictions plans during anti-pollution campaigns in the winter, however the actual impact on steel output is expected to be limited,” said analysts from Huatai Futures. “Construction sites in northern China will close down amid falling temperatures, which would curb demand for steel products.”