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Shanghai stainless steel futures fall on weak downstream demand

Chinese stainless steel futures dropped to their lowest in more than three months on Wednesday, dented by sluggish downstream demand and easing raw material prices.

The most actively traded stainless steel on the Shanghai Futures Exchange, for January delivery, ended down 4.2% at 16,085 yuan per tonne, the lowest close since Sept. 2.

“Planned stainless steel production for December is considerable, but downstream demand is weak,” analysts with GF Futures wrote in a note, adding that lower ferrochrome and stainless steel scrap prices also reduced costs at mills.

Other steel prices on the Shanghai bourse slipped as well. Construction used rebar, for May delivery, declined 2% to 4,350 yuan a tonne. Hot rolled coils, used in cars and home appliances, slipped 2.1% to 4,528 yuan per tonne.

Prices of steelmaking ingredients on the Dalian Commodity Exchange were mixed.

Benchmark iron ore futures were up 1.5% at 659 yuan a tonne, extending gains to a third day, after jumping 4.2% earlier in the session.

Spot prices of iron ore with 62% iron content for delivery to China rose $7 to $111.5 a tonne on Tuesday, according to SteelHome consultancy.

Coking coal prices closed up 2% at 2,056 yuan per tonne. They rose as much as 5.6% to 2,127 yuan in morning trade.

Coke futures on the Dalian exchange dipped 1.3% to 2,917 yuan a tonne.
Source: Reuters (Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu)

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