Shanghai steel prices rise on falling inventory
China’s Shanghai rebar recovered from a dip in the previous session after weekly inventory data showed firm demand from downstream sectors, even as a trade row with the United States intensified.
Weekly stocks of steel products dipped 5,800 tonnes to just below 10 million tonnes as of Friday, data from consultancy Mysteel showed, with rebar stocks falling 2.4 percent. Howver, hot-rolled coil stocks rose 2.3 percent.
Average daily crude steel output at major steel companies over July 21-31 was at 1.91 million tonnes, down 2.5 percent compared with July 11-20, according to China’s Iron & Steel Association (CISA), curbed by stepped up anti-pollution measures across the nation.
Steel inventory at mills also fell 7.45 percent over the same period to 11.44 million tonnes, CISA data showed. And blast furnace utilisation rates at steel mills across the country fell to 66.16 percent, the lowest since early April, Mysteel data showed.
The most-active construction steel rebar futures for October delivery rose 0.9 percent to 4,254 yuan ($622.75) a tonne as of GMT 0214.
Hot-rolled coil on the Shanghai Futures Exchange gained 0.6 percent to 4,224 yuan.
Spot steel products prices fell 0.1 percent to 4478.62 yuan a tonne on Thursday.
“Inventory data implies that supply and demand for steel products are generally in balance,” said analysts at Huatai Futures in a note.
But analysts also warned that hot-rolled coil demand would be much weaker than rebar.
Hot-rolled coil is front-end production of cold-rolled coil which is widely used in automobile, machinery manufacturing and electric appliance sectors.
The most-traded iron ore futures on the Dalian Commodity Exchange climbed 0.9 percent to 515 yuan a tonne on Friday, on track for its strongest weekly gain in nearly eight months, driven by active spot trading in high-quality ore.
Source: Reuters (Reporting by Muyu Xu and Josephine Mason; editing by Richard Pullin)