Chinese steel futures fell for a third day on Friday, with demand in the world’s top consumer of the metal expected to slow over winter and as the economy cools.

China’s industrial output, fixed asset investment and retail sales missed expectations for last month, raising concerns that falling property investment growth would hit steel demand.

Steel appetite is also set to falter as cold temperatures in northern regions crimp construction activity and as the government orders curbs to industrial production as part of its campaign against pollution.

“Investors are increasing bearish on steel demand as the economy and property investment growth is slowing,” said a researcher with an investment firm in Shanghai.

“Meanwhile, steel demand is weakening as construction activity is hit by the cold weather and the government’s crackdown on environmental pollution.”

The most active rebar on the Shanghai Futures Exchange had dropped 1.7 percent to 3,632 yuan ($547.56) a tonne by close. It posted its biggest weekly loss in two months.

Despite falls in steel prices, steelmakers are still making bumper profits of more than 1,000 yuan a tonne, analysts said.

However, coke producers have been incentivised to raise prices after suffering a loss of about 100 yuan a tonne due to higher coking coal costs.

Iron ore futures on the Dalian Commodity Exchange jumped 2 percent to 462.5 yuan a tonne.

Coke futures climbed 1.3 percent to 1,836 yuan a tonne, and coking coal futures edged up 0.7 percent to 1,177 yuan a tonne.

Iron ore for delivery to China’s Qingdao port dropped 0.4 percent to $61.57 a tonne on Thursday, according to Metal Bulletin.

 

Source:in.reuters.com

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