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China’s Ferrous Futures Gain On Rising Use Of Industrial Metals

Chinese ferrous futures rose on Thursday, lifted by rising consumption of industrial metals, while concerns about steel output curbs also underpinned prices.

“Steel products inventory had shown the turning point and downstream demand is picking up,” Huatai Futures analysts said in a note, referring to a drop in stockpiles this week.

Stockpiles of five main steel products held by traders in China fell to 21.7 million tonnes as of Thursday from 22.2 million tonnes a week earlier, according to Mysteel consultancy.

Meanwhile, recent market talks on “carbon neutrality” and “production curbs” also fuelled prices from the supply side, said Huatai Futures.

Construction steel rebar on the Shanghai Futures Exchange , for May delivery, ended up 0.4% at 4,759 yuan ($732.23) a tonne.

Hot rolled coil futures, used in the manufacturing sector, increased 1.1% to 5,005 yuan per tonne.

Shanghai stainless steel futures were up 0.6% to 14,030 yuan at close.

Steel prices were supported by rising raw material prices as futures on the Dalian Commodity Exchange also gained.

Dalian coking coal rose 1.2% to 1,588 yuan and coke jumped 2.5% to 2,335 yuan a tonne.

Benchmark iron ore futures on the Dalian bourse rose 2.5% to 1,089 yuan.

Huatai Futures, however, warned that with carbon emission controls and overall crude steel output-cut plans, iron ore consumption could fall.

Spot 62% iron ore prices stood at $166 a tonne on Wednesday SH-CCN-IRNOR62, data from SteelHome consultancy showed.

FUNDAMENTALS

* Morgan Stanley said anti-pollution measures in China’s top steelmaking city of Tangshan could be the beginning of “major” iron ore market headwinds, potentially taking it from a significant deficit to balance.

* Brazil’s February steel sales rose by 20.9% to 1.88 million tonnes from a year ago, according to trade group Aço Brasil.
Source: Reuters (Reporting by Min Zhang and Dominique Patton; Editing by Subhranshu Sahu and Devika Syamnath)

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