01 Jun 2022 | 06:11 UTC

Shanghai fully reopens for business, steel demand resumes gradually

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Shanghai, China's largest city, reopened for business on June 1 after a two-month COVID-19 lockdown, with most construction sites resuming operations, and steel warehouses reopening for cargo pickup, market sources in Shanghai told S&P Global Commodity Insights.

However, the city rebar demand may take some time to fully recover, the sources added.

People in Shanghai can now leave their homes, return to work, and use public transportation.

On June 1, nearly all of the steel warehouses which closed during the lockdown reopened and allowed traders and end-users to pick up or transport cargo to the warehouses, sources said.

According to Shanghai-based market sources, most building sites in Shanghai have continued to work without further interruption.

"In the last two months, a few construction sites in Shanghai chose a closed-loop management technique," a rebar trader stated.

Although the market has seen a positive signal on steel demand, some market participants were concerned about the time needed to return to pre-lockdown levels, as well as resolution of financial concerns related to some projects.

"There are some challenges with obtaining payments from construction projects," a rebar trader in Shanghai stated. "Certain projects are still running, but there are advance-fund issues," the source noted.

In the active Shanghai market on June 1 morning session, rebar traded at Yuan 4,750/mt ($713/mt), up Yuan 40/mt from May 31.


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