China’s new home prices increased in 65 cities of the 70 surveyed by the national bureau of statistic compared with 64 cities that posted gains in September.

China’s new home prices rose in October against the previous month, underlining continued robustness in the real estate market that typically supports short term steel demand.

Only three of the 70 cities surveyed had seen a fall in prices from October last year. Year-on-year price growth was above 10pc in cities such as Shenyang, Dalian, Changchun, Haikou, Tangshan and Baotou. But prices fell against the previous year in Shanghai and Shenzhen, two of China’s three largest property markets. New home prices in Beijing rose by a modest 0.8pc against a year earlier.

Rainfall in parts of China, winter seasonal construction slowdown and less rigorous steel output controls this winter have pressured prices of construction steel products this month. The Argus-assessed rebar price exworks Shanghai has fallen by 6pc in November at 4,400 yuan/t ($634) on 16 November.

Some steel mills are optimistic on short-term outlook for long products. Long steel stocks are low in Fujian province signalling firm demand. The downwards trend in steel prices is a temporary phenomenon. Steel supplies will see tightness in the winter months as haze persists in north China, said the manager of a Fujian based mill.

But some analysts do not expect any major restocking of rebar by construction sites or trading firms unless prices fall below Yn4,000/t in the short term. Market participants are also expecting a revival in infrastructure sector growth to partially offset any slowdown in real estate demand for steel in the coming months.

Fulya Altunyay/

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