Chinese rebar and hot rolled coil futures on Wednesday closed lower than the previous day after two consecutive days of gains, but average intraday deal prices were higher. This shows that futures are encountering resistance as they are about to exit the current volatile range, Kallanish notes.

On the Shanghai Futures Exchange, the most-traded May 2024 rebar contract closed at CNY 3,518/tonne ($486/t) on Wednesday, down CNY 16/t on the prior trading day. The same contract for HRC lost CNY 31/t to CNY 3,769/t.

Since raw materials futures are improving and government funding to projects is accelerating, steel market sentiment remained positive and thus firmed steel futures. However, current consumption has yet to rebound sharply and production cuts are uncertain. Further price increases were not achieved on Wednesday after gains earlier this week.

In spot markets, steel mills proactively raised quotations to take advantage of the rare rising market. Several rebar offers in eastern China even hiked CNY 50/t in a single day, triggering the market to assess just how much the market had actually improved.