Chinese steel futures dropped for a fourth straight session on Wednesday, hitting a nearly two-week low, as demand in the world’s top consumer faltered ahead of a week-long holiday.
China’s markets will be shut on Oct. 1-5 for the National Day holiday.
“The market is slowing down a bit ahead of the holiday,” said a Shanghai-based trader.
The most-active January rebar contract on the Shanghai Futures Exchange closed down 0.6 percent at 4,064 yuan ($591) a tonne, having touched a session low of 4,027 yuan earlier, its weakest since Sept. 13.
After the holidays, steel prices should recover as China starts imposing production curbs in the northern region to fight smog during winter, with top-steel producing city Tangshan aiming to curb up to 70 percent of mill output based on each plant’s carbon emission levels.
“The supply of steel will still be tight so that should support steel prices,” the trader said.
Chinese steel mills and traders were rushing to secure long-term contracts for high-quality iron ore ahead of the winter steel output cuts, which is a boon for the main supplier of such grades of the commodity, Brazilian mining giant Vale .
January iron ore on the Dalian Commodity Exchange climbed 0.6 percent to 500 yuan a tonne, and coking coal gained 0.1 percent to 1,286.50 yuan. Coke slid 2.3 percent to 2,286 yuan.
Spot iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 0.2 percent to $69.24 a tonne on Tuesday, its loftiest since Sept. 19, according to Metal Bulletin.
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