The price drops came after Chinese authorities launched a new round of measures to curb soaring prices in a bid to ease the cost pressures on downstream industries like electronics producers.
For example, rebar price fell 20-120 yuan ($3.1-18.6) per tonne in several major domestic cities, after reaching a new high ignited by a global demand rebound and rising inflation posed by US monetary easing.
The sharp drops were the first in months as the government sought to discourage speculation, sending a strong message of how China was doing its part in stabilising the market.
A manager surnamed Zheng with Hexin Trading, a steel trading company based in Tangshan, North China's Hebei Province, told the Global Times on Sunday (May 16) that steel prices dropped by 10 per cent due to the government's efforts.
These trends "may have less impact on big steel producers who stocked up on materials earlier at a relatively lower prices," he added.
A staff member at Tangshang Rui Peng Xiang Steel Sales surnamed Li told the Global Times on Sunday that average factory prices of different steel products had fallen about 500 yuan per ton recently, although she didn't say why.
This was part of a series of efforts to ease prices, after the exchanges - including the Shanghai Futures Exchange - adjusted margin requirements and transaction fees to curb speculation.
The US steel price is as high as 10,000 yuan per tonne, compared to around 6,000 yuan in China, because steel supply cannot keep up with the recovery of the US manufacturing industry, the expert said.
Other cause of the soaring steel price is the high price of imported iron ore, which is monopolised by some global suppliers including the Anglo-Australian mining company Rio Tinto Group.
Source: Global Times
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