Chinese steel ingredients fall as regulator extends environmental curbs
Futures prices for China’s steelmaking raw materials faltered on Friday, with the benchmark iron ore contract leading losses, as Beijing mulls to include more cities under its environmental controls.
The Ministry of Ecology and Environment said in a draft guideline on Thursday that it planned to involve 64 regions under key monitoring during winter air pollution campaign.
The regulator said steel mills in those regions would be urged to cut production based on their emission levels during the campaign from October until end-March.
“Stringent production controls have driven market prices lower recently, and pessimistic outlook for demand have intensified,” analysts with SinoSteel Futures wrote in a note.
The most-traded iron ore futures on the Dalian Commodity Exchange DCIOcv1, for January delivery, slumped 7% to 629 yuan ($97.50) at close. The contract plunged 14% this week.
Spot prices of iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62 fell $4 to $115.5 a tonne on Thursday, according to SteelHome consultancy.
Coking coal futures on the Dalian bourse DJMcv1 fell 3.3% to 2,693 yuan a tonne and coke prices DCJcv1 slumped 3.5% to 3,218 yuan per tonne. They fell 4.7% and 8.3%, respectively, for the week.
Construction material steel rebar on the Shanghai Futures Exchange SRBcv1 declined 2.3% to 5,478 yuan a tonne.
Hot-rolled coils SHHCcv1, used in cars and home appliances, slipped 1.8% to 5,677 yuan per tonne.
Apparent consumption for major steel products including rebar and hot-rolled coils fell 5%, as of Sept. 16, to 10.17 million tonnes from the week earlier, data from Mysteel consultancy showed.
Stainless steel futures SHSScv1, however, bucked the trend in morning session and jumped 6.6% to 21,825 yuan per tonne.
Chinese financial markets will be closed during Sept. 18-21 for the mid-autumn festival holiday. Markets will resume trade on Sept. 22.
Source: Reuters (Reporting by Min Zhang and Shivani Singh; Editing by Rashmi Aich and Sherry Jacob-Phillips)