* Shanghai rebar ends well off session peak
* Dalian iron ore tracked steel's rise, but also off day's
* China curbs may cool steel demand from property market
By Manolo Serapio Jr
MANILA, June 16 Chinese steel futures rose for a
third day in a row on Friday but gave up bulk of the day's gains
as the outlook for demand in the world's top steel consumer may
not be too promising, particularly from its property sector.
Shanghai rebar steel futures rose as much as 2.5 percent
amid government efforts to tackle a glut, but pared gains to
less than half a percent at the close.
China said on Thursday that it had cut 42.4 million tonnes
of steel capacity by end-May, representing 85 percent of its
capacity reduction target this year, and sent rebar futures
nearly 4 percent higher that day.
On Friday, the most-active rebar on the Shanghai Futures
Exchange closed up 0.4 percent at 3,091 yuan ($454) a
The construction steel product gained 4 percent this week,
its biggest weekly increase in a month.
But Julius Baer analyst Carsten Menke said the outlook for
steel demand from China's property sector is "not very
promising" with state efforts to cool the market likely to
reduce activity over the coming months.
China has been restricting real estate purchases across its
cities to keep speculation in check and curb soaring prices,
with banks also tightening loans to the sector.
"Adding to this, steel consumption is approaching the
seasonal peak, which should lead to falling production over the
coming months and weigh on the steel mills' demand for iron
ore," Menke wrote in a note.
Firmer steel prices helped lift raw material iron ore, with
the most-traded iron ore contract on the Dalian Commodity
Exchange closing 0.8 percent higher at 426.50 yuan per
tonne. That was below its peak of 436 yuan for the day.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
rose 1.5 percent to $55.23 a tonne on Thursday, according to
The spot benchmark, which hit a one-year low on Tuesday, has
gained 1.5 percent this week, following a three-week decline.
Menke said rising low-cost supply from top exporters
Australia and Brazil should keep the iron ore market "in
oversupply and prices should continue to slide over the coming
"As prices have returned to fundamentally justified levels
faster than expected, we lower our 3- and 12-month targets to
$55 and $50 per tonne. We maintain a cautious view on both iron
ore and steel."
($1 = 6.8126 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Richard Pullin and