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China's steel futures rise on production limits, iron ore extends losses
[BEIJING] China's steel futures picked up on Tuesday, rising as much as 2.5 per cent, as some steel mills began to limit production on the back of recent price falls and an expected softening in demand.
The most-active construction steel rebar on the Shanghai Futures Exchange, for October delivery, rose 1.7 per cent to 3,662 yuan (S$719.50) per tonne as of 0215 GMT. It closed down at 3,589 yuan a tonne on Monday.
"Some steel firms have reached the breakeven levels and have been actively limiting production," said Richard Lu, senior analyst at metals consultancy CRU Group's Beijing office.
"Demand for rebar is expected to soften in the second half of this year and would be in line with the real estate market," Mr Lu said.
The most-traded iron ore contract on the Dalian Commodity Exchange, for January delivery, extended losses but held in a tight range. It was down 0.9 per cent at 620 yuan a tonne as of 0215 GMT.
Port stocks of seaborne iron ore across China stood at 122.5 million tonnes as of August 11, after rising for almost a month, weekly data tracked by SteelHome consultancy showed.
- Benchmark spot 62 per cent iron ore for delivery to China was down 3.2 per cent at US$90.5 a tonne on Monday, the lowest level in over four months, SteelHome data showed.
- Hot-rolled steel used in cars and home appliances rose 1.4 per cent to 3,677 yuan a tonne.
- Other steelmaking inputs also rose, with Dalian coking coal edging up 0.18 per cent at 1,416.5 yuan a tonne while coke gained 1.3 per cent to 1,996 yuan.
- Brazil's mining regulator on Monday pushed back deadlines by up to four years to close dangerous tailing dams.
- China's vehicle sales fell in July for a 13th consecutive month and new energy vehicle sales contracted for the first time in over two years.