China’s steel, iron ore rise as trade war fears ease
Chinese steel futures rose on Tuesday from near nine-month lows as concerns about a potential trade war between China and the United States eased.
Shanghai rebar steel futures rose 2.1 percent to 3,433 yuan ($548.98) a tonne, marking its best performance since February. The contract fell to 3,333 yuan a tonne on Monday, the weakest since July 2017.
The rebound came on news of U.S.-China negotiations, with White House officials asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors, said a person familiar with the discussions.
Chinese Premier Li Keqiang on Monday pledged to maintain trade negotiations and ease access to American businesses.
“The worst moment brought by fears of the trade war may have ended and the market is re-establishing confidence,” said Xu Bo, analyst at Haitong Futures.
Prices of steel raw materials also rebounded on Tuesday. The most-traded iron ore futures on the Dalian Commodity Exchange rose 1.3 percent to 444 yuan a tonne, posting its biggest one-day gains in four weeks.
The coking coal contract for May delivery rose 0.8 percent to 1,251.5 yuan a tonne, while coke futures closed 0.7 percent lower to 1,841 yuan a tonne.
“Price recovery is also being buoyed by expectations of increasing demand at downstream users and improving utilisation rates at steel mills,” said Xu.
Stockpiles of construction steel rebar last week fell for the first time since the beginning of December, declining by 293,500 tonnes to 9.49 million tonnes as of March 23 from a week earlier, data compiled by SteelHome consultancy showed.
The utilisation rate at steel mill blast furnaces across China climbed by 1.1 percentage points to 63.12 percent last week from the prior week, bouncing to the level before the annual national parliamentary meeting in early March, data from the Mysteel consultancy showed.
However, mills in northern China remain under production curbs, with more than 34 cities blanketed by a bout of smog that is expected to lift by Wednesday.
Spot steel rebar prices fell 1.9 percent to 4,000.13 yuan a tonne on Monday, according to data at Mysteel website.
Iron ore for delivery to China’s Qingdao port dropped $0.25 a tonne to $64.33/tonne on Monday, according to Metal Bulletin.
Source: Reuters (Reporting by Muyu Xu and Tom Daly; Editing by Richard Pullin and Sherry Jacob-Phillips)