China steel futures dive 6% on concerns of changes in steel output
Chinese ferrous futures fell on Monday, with steel rebar and hot rolled coils both plunging some 6%, after Beijing updated its stance on carbon reduction work, raising worries of an adjustment in output cuts.
A Politburo meeting chaired by President Xi Jinping on Friday said China should avoid “campaign-style” carbon reduction efforts.
While there were some places blindly launched projects with high emissions and energy consumption, there were others that “over-reacted” and made emission-cut plans too early, state media Xinhua said in a commentary, adding that such attempts could affect normal economic development.
“The requirement (by Politburo) could revise the crude steel output cut task, and possibly have a strong impact on steel prices in the short term,” analysts with Haitong Futures said in a note.
Both steel rebar and hot rolled coils posted their biggest percentage loss in ten weeks.
The most-traded construction rebar on the Shanghai Futures Exchange SRBcv1, for October delivery, slumped as much as 6.4% to 5,367 yuan ($829.89) per tonne. They were down 5.6% at 5,414 yuan at close.
Hot rolled coils on the Shanghai bourse SHHCcv1, used in cars and home appliances, dived 5.7% to 5,780 yuan a tonne, after falling 6.5% earlier.
Stainless steel futures, for September delivery, fell 2.5% to 19,390 yuan per tonne.
Raw material prices on the Dalian Commodity Exchange also declined.
Benchmark iron ore futures DCIOcv1 extended losses into a fifth straight session, closed down 0.9% at 1,054 yuan per tonne.
Spot prices of iron ore, with 62% iron content for delivery to China, dropped $12.5 to $185 a tonne on Friday, the lowest since May 26, according to SteelHome consultancy.
Dalian coking coal futures DJMcv1 dipped 0.2% to 2,289 yuan a tonne and coke DCJcv1 slipped 1% to 2,900 yuan per tonne.
Source: Reuters (Reporting by Min Zhang and Shivani Singh; Editing by Amy Caren Daniel)