China steel futures rise on fresh smog alerts

[BEIJING] Shanghai steel futures rose almost 1 per cent in early trade on Monday after key steelmaking cities in Northern China issued pollution alerts to arrest the deteriorating air quality in the region.

Top steelmaking city Tangshan said it would launch a second-level pollution alert later in the day, following Shanxi and Shandong provinces which started the alerts over the weekend.

The alerts disrupted production at mills, boosting steel futures in China even as demand cools in winter due to slowing construction activity.

Construction steel rebar on the Shanghai Futures Exchange, for May 2020 delivery, was up 0.7 per cent at 3,540 yuan (US$684.82) per tonne, as of 0229 GMT. It gained as much as 0.9 per cent to 3,548 yuan per tonne earlier in the session.

Hot-rolled coil, used in cars and home appliances, jumped 1.0 per cent to 3,574 yuan per tonne.

The most-traded iron ore futures on the Dalian Commodity Exchange rose 0.5 per cent at 642 yuan per tonne.

FUNDAMENTALS

- Prices for spot cargoes of iron ore with 62 per cent iron content for delivery to China fell by US$1.5 to US$93 per tonne on Friday.

- Dalian coking coal futures edged up 0.17 per cent to 1,184 yuan per tonne, and Dalian coke rose 0.16 per cent to 1,880 yuan per tonne.

- Shanghai stainless steel futures climbed 0.3 per cent to 14,435 yuan per tonne.

- Brazil's Vale SA said on Friday it was buying back a 36.4 per cent stake in its MBR production and transport unit from asset manager Bradesco BBI for 3.3 billion reais (S$1.09 billion), more than four years after selling it.

- China will lower tariffs on products ranging from frozen pork and avocado to some type of semiconductors next year, the finance ministry said, as Beijing looks to boost imports amid a slowing economy and a trade war with the United States.

REUTERS