Chinese rebar futures declined on the week Sept. 2 on weak market sentiment amid strict COVID-19 measures in China and associated demand concerns. The weakening of rebar futures also came due to an increase in production and the potential raising of interest rates by the US Federal Reserve.

         The most actively traded January 2023 rebar contract on the Shanghai Futures Exchange closed at Yuan 3,637/mt ($528/mt) Sept. 2, down Yuan 229/mt ($33/mt) week on week.

         Market participants said they were concerned about the demand for construction steel in Q3 amid strict pandemic-related measures and a weak economy in China, with some saying the “golden demand” is unlikely to emerge in September and October.

         More infrastructure projects need time to begin operations and the financial issues of some projects, and the weak property market slowed down the construction steel demand, sources said.

         The US Federal Reserve has also signaled that it was likely to keep raising interest rates and leave them elevated for a while to stamp out inflation, affecting market confidence.

         Market participants said they expect an increase in crude steel production from electric arc furnaces in China as the power restrictions have resolved after China’s heatwave eased, and the country's scrap supply had risen.