China's steel futures prices edged up on December 20 amid expectations of firmer demand as the government takes steps to support the economy and on concerns that supply could tighten as winter production curbs bite.
The outlook for demand from construction was buoyed as two cities in China relaxed restrictions designed to curb real estate flipping - the latest sign of efforts by local governments to revive flagging property sales.
Meanwhile, China's central bank on December 19 rolled out a targeted policy tool to spur lending to small and private firms.
"Policymakers have taken more steps to ease downtrend economic pressure, which would help to further boost market sentiment," analysts said in a note.
Benchmark Shanghai rebar steel prices had risen 0.8% to 3,458 yuan/t ($500.26/t) by 0205 GMT.
Expectations of tighter supply also helped drive up China's ferrous market, with top steelmaking hub Hebei forecasting that smog will blanket the region from December 20-24.
At least three cities in Hebei, including provincial capital Shijiazhuang, have ordered industrial plants and miners to limit operations to lower toxic emissions, state-backed national radio reported.
Cities in northern China have recently ordered steel mills to curtail additional output towards year-end as local authorities' effort to meet annual air quality targets.
"Utilization rates at Chinese steel mills are expected to maintain their downward trend in the coming month. However, steel mills will still have restocking demand as their inventory of raw materials remains at low levels," analysts said.
Source:sxcoal
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