Chinese steel futures climbed to their strongest level in five weeks on Monday, supported by falling stockpiles that pointed to a pickup in construction demand.

The strength in the steel market spread to raw materials iron ore and coking coal, with iron ore scaling a one-month peak.

The most-active rebar on the Shanghai Futures Exchange rose as far as 3,547 yuan ($563) a tonne, its loftiest since March 16, and was trading at 3,545 yuan by 0257 GMT, up 2 percent.

Inventories of rebar, a construction steel product, had dropped 16 percent to 8.25 million tonnes on April 13 from a five-year high in mid-March, data compiled by SteelHome consultancy showed. SH-TOT-RBARINV

Some Chinese steelmakers have increase prices over the weekend in anticipation of firmer demand, said an iron ore trader in Shanghai.

Steel demand in China, the world’s top consumer, is usually strongest in April and May when the construction sector is at its busiest time of the year.

“The construction steel market may have more room to strengthen,” the trader said.

Iron ore on the Dalian Commodity Exchange was last up 2.7 percent at 479.50 yuan a tonne, after earlier hitting 481.50 yuan, its highest since March 22.

Also aiding sentiment on iron ore, stockpiles of the commodity at major Chinese ports dropped for a third week in a row.

They stood at 159.78 million tonnes on April 20, from a record high of 161.68 million tonnes at the end of March, SteelHome data showed. SH-TOT-IRONINV

Other steelmaking raw materials also rose. Coke jumped 3.4 percent to 1,922 yuan a tonne, having touched a five-month peak of 1,930 yuan initially, and coking coal increased 1.7 percent to 1,170.50 yuan.

 

Source: in.reuters.com

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