Chinese steel futures rose about 4% on Monday, as inventories of the industrial metals fell for a fourth straight week and downstream demand picked up.
Stockpiles of five main steel products including rebar and hot rolled coils dipped 1.1% last week from a week earlier to 21 million tonnes, data from Mysteel consultancy showed, while apparent consumption rose 1.2% to 10.36 million tonnes.
“With the arrival of the peak season, demand is expected to get better, and a tightening crude steel cut policy will benefit far month steel contracts,” GF Futures wrote in a note.
The most-active steel rebar on the Shanghai Futures Exchange SRBcv1, for January delivery, ended up 4% to 5,354 yuan ($827.68) a tonne.
Hot rolled coils SHHCcv1, used in the manufacturing sector, gained 3.8% at 5,637 yuan at close.
Stainless steel futures on the Shanghai bourse SHSScv1 jumped 3.9% to 18,125 yuan a tonne.
Prices of steelmaking ingredients on the Dalian Commodity Exchange also increased.
Benchmark iron ore futures DCIOcv1 opened 4.9% higher before giving up most of the gains. They were last up 0.7% at 835 yuan a tonne.
Spot prices of iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62 rose by $4 to $156 a tonne, according to SteelHome consultancy.
“Global iron ore production growth will accelerate over 2021-2025 after stagnating during the previous five years,” Fitch Solutions wrote in a note, adding China’s ore output would grow.
FUNDAMENTALS
* Dalian coking coal futures DJMcv1 inched 0.1% higher to 2,495 yuan a tonne.
* Coke futures DCJcv1 were up 2.0% to 3,187 yuan a tonne.
* China’s top listed steel producer Baoshan Iron & Steel 600019.SS said steel production controls could ease its cost pressure.
* The southern Guangxi region vowed to firmly control “blind development” of high energy-consuming projects and to crack down on illegal projects, after the region failed energy target in the first half, local government-backed media said on Monday.
Source: Reuters (Reporting by Min Zhang and Dominique Patton; Editing by Subhranshu Sahu and Rashmi Aich)
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