Concerns about weak demand have led traders in China to be cautious about restocking steel ahead of the lunar new year holiday. Ordinarily, stocks would be replenished in order to start selling after the break. Last year’s restocking was followed by slower-than-expected demand, causing steel prices to fall nearly 20% in a single month. Traders typically replenish their stocks ahead of the Chinese new year break, due in early February this year, and sell them when downstream users go back to work after the week-long holiday. The Shanghai Composite Index fell more than 2% on Monday and is now down over 10% from its peak.
Concerns about weak demand have led traders in China to be cautious about restocking steel ahead of the lunar new year holiday. Ordinarily, stocks would be replenished in order to start selling after the break. Last year’s restocking was followed by slower-than-expected demand, causing steel prices to fall nearly 20% in a single month. The Shanghai Composite Index fell more than 2% on Monday and is now down over 10% from its peak.