Chinese steel futures steadied on Monday after recent sharp gains that pushed the metal to a six-month high last week, but a firm outlook for demand underpinned prices.
China’s daily crude steel output averaged 2.53 million tonnes on May 10-20, Argonaut Securities analyst Helen Lau said in a note. That compares with the April daily average of 2.56 million tonnes, which was the highest since at least May, 2014.
“The rising steel production is driven by strong underlying demand,” Lau said.
The most actively traded rebar for October delivery on the Shanghai Futures Exchange closed nearly flat at 3,803 yuan ($594) a tonne, after recovering from the day’s low of 3,755 yuan. The construction steel product touched 3,869 yuan on Thursday, its strongest since early December.
Underlining firm consumption in China, the world’s top steel consumer, rebar stocks among Chinese traders had fallen nearly 50 percent from mid-March to 5.04 million tonnes as of June 8, data tracked by SteelHome consultancy showed.
China’s robust steel consumption and production had pushed up the country’s imports of raw material iron ore by 13.5 percent from April to 94.14 million tonnes last month, government data showed on Friday.
“This likely reflects strong profitability of Chinese steel mills,” Barclays analysts said.
Stocks of iron ore at China’s major ports slipped marginally to 161.03 million tonnes on Friday from a record 161.98 million tonnes the previous week, SteelHome data showed.
Spot iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 0.9 percent to $67.44 a tonne on Friday, a three-week high, according to Metal Bulletin.
On Monday, the most-traded September iron ore on the Dalian Commodity Exchange ended 0.6 percent higher at 470 yuan a tonne.
Coke slipped 0.2 percent to 2,072 yuan per tonne and coking coal dropped 0.8 percent to 1,244 yuan.
Source: ReutersPrevious Next