Chinese steel prices recover from losses to edge up
China’s construction steel futures recovered from the steep declines seen across international commodity and equity markets to close higher on Thursday, as possible Chinese production curbs ahead of winter remained in focus.
Asian share markets sank on Thursday after Wall Street suffered its worst drubbing in eight months.
Shanghai benchmark construction steel futures initially fared little better, falling as much as 2.1 percent to 3,958 yuan ($571.12) a tonne early in the session, before closing up 0.3 percent at 4,056 yuan a tonne.
Hot-rolled coil futures plunged 3 percent to 3,831 yuan, but rallied to close down 1 percent at 3,909 yuan a tonne.
The most-active iron ore futures on the Dalian Commodity Exchange ended down 0.5 percent at 511.5 yuan a tonne, although spot prices for iron ore with 62 percent content climbed to $70.9 on Wednesday.
Markets are still paying close attention to regional plans for winter cuts to industrial output, part of the government’s years-long battle against pollution.
The Yangtze River Delta region in the country’s east, which includes key manufacturing hubs, is working on a new integrated winter pollution plan similar to one in northern areas, said officials at two local environment bureaus.
“Supply is expected to reduce as more regions publish their anti-pollution action plans,” analysts at Huatai Futures said in a note.
Shanxi province, a major coal mining hub, this week vowed to cut coking capacity and annual coke output as part of its campaign against smog.
Dalian’s most-traded coke contract, for January delivery , closed up 0.4 percent at 2,455 yuan a tonne, while coking coal futures ended 0.9 percent higher at 1,366.50 yuan a tonne.
Source: Reuters (Reporting by Muyu Xu and Aizhu Chen Editing by Joseph Radford)