Chinese steel rebar and hot rolled coils futures closed at record highs on Tuesday, rising as much as 6.7% and 7.7% respectively, as production curb worries and peak season demand overshadowed a fee adjustment by exchanges.
The state planner has urged local governments to complete “self-inspection” for their steel projects and full-year output cut plan by mid-May, before it conducts on-site checks in June and July.
The announcement, seen as a curtain raiser for more crude steel production curbs, came as China's factory gate prices expanded at the fastest pace in more than three years last month.
“Current demand for construction materials is still robust… domestic hot rolled coils prices are also driven by a surge in overseas markets,” analyst with CITIC Futures wrote in a note.
The most traded construction rebar on the Shanghai Futures Exchange, for October delivery, extended gains into a sixth session and closed 4.6% higher at 6,086 yuan ($947.15) per tonne.
Hot rolled coils, used in the manufacturing sector, jumped to 6,591 yuan a tonne intraday before closing 6.9% higher at 6,540 yuan.
The September contract for benchmark iron ore futures on the Dalian Commodity Exchange rose for the fourth straight session. It climbed 1.7% to 1,307 yuan per tonne.
Spot prices of iron ore with 62% iron content for delivery to China rose $19 to $231 a tonne on Monday, data from SteelHome consultancy showed.
“Most market participants believe the surge (on Monday) was a speculative move,” ING Economics said in a note.
But optimism over supportive policies and robust demand would support the iron ore market, it added.
Dalian coking coal gained 2.1% to 2,028 yuan a tonne, while coke futures plunged 2.9% to 2,828 yuan.
Shanghai stainless steel, for June delivery, rose 1.6% to 15,395 yuan per tonne.
Source: Reuters
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