China steel futures rise amid speculation output curbs could be extended

1 February 2018

Chinese steel futures rose on Thursday after four days of losses, bolstered by market speculation that curbs on output at some steel mills could be extended beyond winter.

The most active rebar on the Shanghai Futures Exchange had risen 0.9 percent at 3,953 yuan ($627.96) a tonne by 0231 GMT.

“There are expectations that the output curbs will be extended by a longer period, lifting market sentiment even though physical demand remains weak,” said a steel trader in Shanghai.

China’s government ordered producers in 28 cities to cut output between mid-November and mid-March to reduce air pollution.

Iron ore on the Dalian Commodity Exchange slipped 0.3 percent to 510 yuan a tonne, amid concerns that appetite from the world’s top buyer could weaken if steel mills keep cutting production beyond winter.

Coke rose 1.1 percent to 2,019.5 yuan a tonne and coking coal edged up 0.5 percent to 1,296 yuan a tonne.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB stood largely steady at $72.92 a tonne on Wednesday, according to Metal Bulletin.