Reuters reported that Shanghai steel rebar futures fell towards an all time low on Thursday as traders in top consumer China, faced with weak demand, ran down stockpiles and were forced to slash prices.

The most traded rebar for October delivery on the Shanghai Futures Exchange fell to CNY 3,145 (USD 500) a tonne, a whisker away from the record low of CNY 3,141 touched in March.

Chinese steelmaker Yangang sold steel billet at CNY 2,867 a tonne at a tender on Wednesday, down CNY 40 from the previous week.

According to industry consultancy Mysteel “Inventory of five major steel products held by Chinese traders, including rebar, fell to 15.98 million tonnes as of May 9 from 16.47 million tonnes the previous week.”

Helen Lau, senior mining analyst at UOB-Kay Hian Securities in Hong Kong said “Chinese demand weakened this month, forcing traders to destock.

Downstream demand has turned weak and the only way to sell to the market right now is to lower your prices.”

The weaker steel market and persistently tight credit conditions in China have curbed appetite for spot iron ore cargoes, keeping prices of the raw material near their lowest since September 2012.