China’s RRR cut fails to support domestic rebar prices

China’s RRR cut fails to support domestic rebar prices
Published by:Jessica Zong<>
7 May 2025 @ 09:37 UTC

China’s domestic rebar prices failed to increase on Wednesday May 7 despite the country’s central bank, the People’s Bank of China (PBOC), reducing the reserve requirement ratio (RRR) for commercial banks, sources told Fastmarkets. The PBOC cut its RRR by 0.5 percentage points, injecting approximately 1 trillion yuan ($139 billion) of long-term liquidity into the market, Pan Gongsheng, PBOC’s president, said in a press conference on Wednesday.
Public housing fund loan rates for first-home buyers were also reduced by 0.25 percentage points, with the five-year rate falling from 2.85% to 2.6%, Pan said.
The news initially stimulated an increase in the October rebar futures contract prices on the Shanghai Futures Exchange during morning trade. The October rebar futures contract price reached an intraday high of 3,136 yuan per tonne on Wednesday, up by 59 yuan per tonne from a closing price of 3,077 yuan per tonne the day prior.
However, futures prices soon dropped because market participants did not believe that the property sector would benefit significantly from the reduction of the RRR and housing loan rates.
Market participants indicated that it was difficult to boost buying interest in purchasing homes solely due to lower housing loan rates.
In the spot market, rebar buyers reduced their procurement tonnages in response to the price retraction in the futures market. Sellers, on the other hand, kept prices stable, adopting a wait-and-see approach.
Fastmarkets’ daily price assessment for steel reinforcing bar (rebar) domestic, ex-whs Eastern China was 3,080-3,100 yuan per tonne on Wednesday, unchanged from Tuesday May 6.
Market Chatter
The demand for rebar shows no signs of increasing in May compared with April. Market sentiment regarding demand for the remainder of the year is generally bearish. As a result, some buyers are holding off on their procurement plans and waiting to see how prices develop, an industry analyst said.
Billet
Fastmarkets’ daily price assessment for steel billet domestic, exw Tangshan, Northern China was 2,990 yuan per tonne including value-added tax on Wednesday, up by 40 yuan per tonne from 2,950 yuan per tonne on Tuesday.
Shanghai Futures Exchange
The most-traded October rebar futures contract on the Shanghai Futures Exchange closed at 3,098 yuan per tonne on Wednesday, up by 21 yuan per tonne from 3,077 yuan per tonne on Tuesday.