China ferrous futures jump as macro recovery fuels demand hopes
Chinese ferrous futures rose on Thursday on expectations of global demand rebounding from pandemic lows, while supply worries sparked by output curbs in top steelmaking city Tangshan also fuelled gains.
The most actively traded steel rebar on the Shanghai Futures Exchange, for May delivery, surged as much as 3.8% to 4,746 yuan ($735.53) per tonne, the highest since August 2009. The contract closed up 2.5% at 4,686 yuan a tonne.
Hot rolled coil, used in the manufacturing sector, gained 2.4% to 4,908 yuan a tonne.
“The carbon neutrality policy and Tangshan’s production restrictions have restrained output… demand after holidays could restart earlier,” analysts with GF Futures said in a note.
“The pandemic situation at home and abroad is improving, the macro atmosphere is picking up and the prices rise to repair earlier poor expectation.”
Demand for five main steel products in China, including rebar, wire rod, hot rolled and cold rolled products and medium plates, surged 24% to 7.43 million tonnes as of Feb.25 from the previous week, data from Mysteel consultancy showed.
Shanghai stainless steel futures for April delivery increased 1.8% to 15,500 yuan a tonne at close.
Prices for steelmaking ingredients also rose.
Coking coal futures jumped 3.8% to 1,528 yuan a tonne and coke was up 2.6% at 2,625 yuan a tonne.
“Steel mills’ production… and prices for finished products still sustain coke prices,” said GF Futures.
Benchmark iron ore futures on the Dalian Commodity Exchange ended up 1.4% to 1,131 yuan a tonne.
Spot prices of iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62, however, fell by $2 to $173.5 per tonne on Wednesday, according to SteelHome consultancy.
Source: Reuters (Reporting by Min Zhang and Shivani Singh; Editing by Devika Syamnath)