The domestic steel prices in China for all products have been coming down almost on daily basis for almost last 90 days since mid December 2014.

The dip in prices, during this period, for different items is varying but rebar seems to be hardest hit.

While rebar prices at Shanghai have crashed by almost 15% to about CNY 3070 per tonne now as compared to CNY 3600 per tonne on December 15th 2014, HRC prices at Shanghai have lost only 5% to reach CNY 3430 per tonne from last high of CNY 3630 on December 15th.

Incidentally the prices of billets at Shanghai, during this period, have come down by about 12% thus reducing the gap between billet and rebar from CNY 400 to CNY 250 per tonne, reflecting squeezed margins for steel makers.

On the other hand, after 10% crash on weekend, prices of 63.5/63% iron ore have posted recovery of about USD 4 per tonne to climb back to USD 110 per tonne CFR China levels from recent low of USD 104. Due to credit squeeze by banks, owners of iron ore cargos are in a state of panic with more than 100 million tonne inventory at Chinese ports. They are facing huge losses of about USD 10 per tonne to USD 15 per tonne and could be resisting slide to levels seen on Monday as the fundamentals in Chinese steel sector have remained unchanged over last few days.