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China’s steel prices fell to their lowest in nearly a month on Tuesday

Benchmark Shanghai prices for rebar, a steel product mainly used in construction, dropped 1.1 percent at 3,573 yuan ($560.38) a tonne. Earlier in the session, they hit their lowest since April 27 at 3,556 yuan. Investors have piled on bearish bets in recent days as analysts and traders have warned of possible delays by mills on booking orders, stirring worries about consumption.

Extending losses into a third session on worries about weakening demand amid strong supply in the world’s top producer of the material. Those concerns offset news that the country’s state planner will send out eight inspection teams to check that shuttered excess capacity has not been restarted and that low-grade steel is not being produced.

Daily crude steel output by major steel companies over May 1-10 reached 1.94 million tonnes, higher than the previous peak of 1.91 million tonnes in late April, data from China’s Iron & Steel Association (CISA) showed on Monday. That was up nearly 8 percent from same period last year.

Steel inventory at steel mills also climbed in the same period, adding 1.17 million tonnes to 13.61 million tonnes, CISA data showed, suggesting lukewarm demand from downstream sectors. “Steel consumption growth in China will slow over the coming quarters as demand from the construction, infrastructure and autos sectors slows,” BMI Research said in a note.

Waning downstream demand for steel will likely weigh on consumption of raw materials, analysts said. Falling for a fifth straight session, iron ore futures for September delivery on the Dalian Commodity Exchange touched 453 yuan a tonne, their lowest level in 5 weeks, before closing down 2.6 percent at 456 yuan a tonne.

Spot steel prices dipped just 0.1 percent to 4,311.86 yuan a tonne on Monday, according to data from Mysteel consultancy, as stable prices at major mills to some extent helped to lift market sentiment. Jiangsu Shagang Group, the number one privately owned steel producer by capacity, maintained its factory prices for some rebar and wire products for May 20-31, it said in a statement on Monday.

On Monday, the US Commerce Department slapped steep import duties on steel products, mainly cold-rolled and corrosion resistant steel, from Vietnam that originated in China. The most-traded hot-rolled coil futures, an upstream material of cold-rolled coil, went down 0.7 percent to 3,762 yuan a tonne.

“It remains uncertain how big the impact will be as it might be difficult for US policy to be fully implemented. But in the short term, we may see oversupply in domestic market if exports to Vietnam experience resistance,” said a manager at a Hebei-based steel trading company.

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