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Steel futures gain on hopes of rising China consumption

Chinese steel rebar and hot rolled coil futures rose on Thursday, shored up by expectations of further demand on upbeat economic indicators and Beijing’s efforts to stimulate consumption.

China’s excavator sales in the first two months of 2021 surged 149% from same period year earlier, according to a state media report, suggesting a buoyant infrastructure sector.

Meanwhile, the industry ministry and other departments jointly issued a notice encouraging new energy vehicle sales in smaller cities and rural areas.

The most traded construction rebar on the Shanghai Futures Exchange, for May delivery, closed up 1.0% at 5,003 yuan ($761.26) per tonne.

Hot rolled coil futures, used in cars and home appliances, jumped 1.5% to 5,467 yuan per tonne.

Benchmark iron ore futures on the Dalian Commodity Exchange also gained.

The most actively traded May contract rose 1.2% to 1,104 yuan a tonne, while the September contract – with the most open interest – jumped 2.8% to 976 yuan per tonne.

Spot 62% iron ore for delivery to China was unchanged at $166 a tonne on Wednesday from the previous session, according to consultancy SteelHome.

Other steelmaking ingredients were mixed, with Dalian coking coal plunging 4.0% to 1,591 yuan a tonne and coke rising 2.5% to 2,341 yuan per tonne.

FUNDAMENTALS

* Stainless steel futures on the Shanghai bourse fell 1.8% to 14,285 yuan a tonne.

* China’s factory activity at small, private and export-oriented firms expanded at the slowest pace in almost a year, the Caixin survey showed, but underlying economic conditions remained positive.

* China’s State Council, the country’s cabinet, said on Wednesday the country would further cut taxes for smaller firms and advanced manufacturing companies would see preferential tax policies as well.
Source: Reuters (Reporting by Min Zhang and Shivani Singh; Editing by Amy Caren Daniel and Mark Potter)

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