It is reported that rebar prices have turned stable since early July 2008. Downstream demand for rebar has come back when plum rain came to an end at the start of July.

Mr Liang Taigeng GM of Shanghai Hualei Enterprise Co Ltd said that rebar price in Shanghai would remain in fluctuation and tend to rise slightly.

As per report, long heavy rain has exerted adverse effect on construction and it led to drop in rebar demand. But now buyers have come back to market and there has been more demand than last month, especially HRB400 28mm or 32mm rebar.

1. Demand from construction industry has turn better despite high temperature. High speed railway, subway, and tunnel construction are still in the process and there would be no decrease but increase in demand in this summer.

2. Higher cost is bolstering the further increase in steel price. Chinese steel makers have to raise price to offset the increasing cost and there is almost no room for drop in market prices.

3. High international market price is supporting rebar exports. The great price gap between overseas market level and Chinese ex works prices has led to robust exports and it is in the interests of the booming of domestic market.

4. No pressure of oversupply due to cut and suspension in output by some steel producers in North China. Those steel mills are required to reduce production so as to help improve the quality of air surrounding Beijing where Olympic Games is to be held in early next month. Most of the tonnages they cut are construction steel production.

Therefore rebar price in Shanghai are going to remain in a dull period but would go up slightly in the next two to three weeks.