Chinese steel rebar futures fell to a fresh record low in the final session before the National Day holiday, with few anticipating any big upturn in demand over the rest of the year, especially as export volumes decline.
Mainland China's slowing economy has aggravated long-standing overcapacity problems in its steel sector, by far the world's biggest, sending prices to their lowest level in more than two decades.
"It is clear the market is getting worse," said an iron ore trader in Tangshan, China's biggest steel-producing city.
Chinese steel exports rose 26.5 per cent in the first eight months of the year, helping mask the decline in domestic consumption, but that lifeline is now also under threat.
"Steel exports are already in decline in the second half, partly because of weak demand, but also because prices overseas are already lower than costs," the trader said.
The most-traded rebar contract on the Shanghai Futures Exchange fell 1 per cent yesterday to 1,821 yuan (HK$2,214) a tonne, its lowest close since its launch in 2009. It fell 7 per cent last month and is down by a third since the start of the year.