Chinese rebar futures extended gains into a third session on Thursday after the country said it would ban new capacity for steel, coke and primary aluminium production in some key areas.
As part of a new three-year anti-pollution plan, the state council pledged a clampdown on any new capacity for steel, coke and electrolytic aluminium in regions such as Beijing-Tianjin-Hebei and Yangtze River Delta to curb industrial emissions, which are believed to be a main source of smog.
The announcement came a few days after the environment ministry said it will carry out a new round of inspections in 28 northern cities and some other smog-prone regions from June to April next year.
“The environmental policies are having bigger impacts on the market than expected, putting supply and demand at a relatively balanced situation,” said Richard Lu, an analyst at CRU in Beijing.
China’s steel output surged to a record 81.13 million tonnes in May, official data showed on Thursday, but it did not affect the bullish outlook held by investors.
The most-active rebar contract on the Shanghai Futures Exchange closed up 0.9 percent at 3,897 yuan ($609.75) a tonne on Thursday.
Spot steel prices gained 0.4 percent to 4,379.5 yuan a tonne on Wednesday, data from Mysteel consultancy showed.
Prices for steelmaking raw materials were slightly changed on Thursday.
The mostly traded iron ore futures on the Dalian Commodity Exchange rose 0.9 percent to 473.5 yuan.
“Iron ore trading remains active with support of firm steel prices,” CITIC Futures analysts said in a note in Mandarin, but warned of oversupply pressure from increasing shipment from Australia.
Iron ore shipments to China from Australia’s Port Hedland terminal, a major shipping junction used by the countries top iron ore miners BHP Billiton and Fortescue Metals Group , rose 2.4 percent to 37 million tonnes in May compared with a month earlier.
As of June 8, stockpiles of imported iron ore reached 161.03 million tonnes, just below the record level of 161.98 million tonnes in the previous week, data compiled by SteelHome Data showed.
Spot iron ore for delivery to China’s Qingdao port .IO62-CNO=MB fell 0.3 percent to $67.02 a tonne on Wednesday, according to Metal Bulletin.
Source: ReutersPrevious Next