Shanghai rebar steel futures rebounded on Friday from a five-week low as investors piled back into Chinese commodities markets in anticipation of a pickup in demand after the Lunar New Year holiday.
The recovery in rebar fueled a rise in steelmaking raw materials iron ore and coke to multi-week highs, and came along with similar gains in copper, aluminium and nickel.
The most-active rebar contract for on the Shanghai Futures Exchange closed up 1.8 percent at 3,949 yuan ($623) a tonne, after earlier hitting 3,841 yuan, matching Thursday’s five-week trough. Volume traded on the most-active May contract reached 3.57 million lots, the largest since Jan. 25.
Rebar rebounded from Thursday’s 1.7-percent drop amid expectations steel demand in China, the world’s top consumer and producer, would strengthen as construction projects resume during spring after the week-long Lunar New Year holiday that ended on Wednesday.
“Chinese market participants have an overall optimistic outlook on Chinese economic conditions and believe the recent overseas market recovery fosters positive sentiment,” Argonaut Securities said in a note.
Inventories of rebar among Chinese traders reached 5.4 million tonnes in the week ending Feb. 9, the most since April last year, according to data compiled by SteelHome consultancy. SH-TOT-RBARINV
“I don’t expect much buying yet to happen this week or next week,” said a trader in Shanghai. “By March there will be more demand.”
Chinese steel mills are expected to boost output when winter curbs, aimed at fighting air pollution, are lifted mid-March as the winter season heating ends.
The most-traded May iron ore on the Dalian Commodity Exchange closed 2.1 percent higher at 548.50 yuan a tonne, just shy of the day’s peak of 549 yuan, its strongest since Jan. 12.
Coke climbed 3 percent to 2,221 yuan per tonne, near the intraday high of 2,223.50 yuan, its loftiest since Dec. 5. Coking coal rose 1.7 percent to 1,398 yuan a tonne, near Thursday’s three-month peak of 1,408.50 yuan.
Iron ore for delivery to China’s Qingdao port was little changed at $78.20 a tonne on Thursday, according to Metal Bulletin.
Source: ReutersPrevious Next
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