September 30, 2019 / 4:25 AM / a month ago

China steel, iron ore rise on hopes of demand recovery

* Shanghai steel rebar climbs up to 4.3%

* Dalian iron ore jumps as much as 3.8%

* China markets shut Oct. 1-7 for holidays

By Enrico Dela Cruz

MANILA, Sept 30 (Reuters) - China’s steel and iron ore futures jumped in early trade on Monday, with construction material rebar up more than 4%, after the country’s central bank vowed to step up efforts to lift a slowing economy.

While spot markets have been generally quiet since last week ahead of a long holiday in China, sentiment got a further boost from a private business survey showing China’s factory activity expanded at the fastest pace in 19 months in September.

The most-traded rebar contract on the Shanghai Futures Exchange, with January 2020 expiry, rose as much as 4.3% to 3,580 yuan ($502.74) a tonne.

Hot-rolled steel coil, used in cars and home appliances, jumped up to 2.2% to 3,527 yuan a tonne.

The Chinese markets will be closed from Tuesday, when the nation marks the 70th anniversary of the People’s Republic, until Oct. 7.

Many of the nation’s steel mills have been ordered to shut or limit operations starting last week to curb pollution ahead of the Oct. 1 celebrations in Beijing.

China will “continue to implement a prudent monetary policy and increase the strength of counter-cyclical measures”, the central bank said in a statement on Sunday.

Singapore-based steel and iron ore data analytics firm Tivlon Technologies expects demand for steel in China to pick up in the coming weeks, which may prompt increased purchases of iron ore.

“Tivlon analytics is suggesting market participants positioning for upside of the ferrous market after the national holiday,” said Tivlon data scientist Darren Toh.

“We are also seeing accelerating drawdown in steel inventory as infrastructure projects kick off,” he said.


* The most-traded iron ore on the Dalian Commodity Exchange jumped as much as 3.8% to 663.50 yuan a tonne. The steelmaking raw material was on track to post a monthly gain of more than 10%, following a 23.3% drop in August.

* Spot cargoes of benchmark iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62 were steady at $92.50 a tonne from Wednesday to Friday last week amid sluggish trading ahead of the Chinese holidays.

* Top iron ore exporter Australia has scaled back its expectations for record export revenue from mining and energy in the 2019/20 financial year as trade tariffs chill global economic growth, the government said on Monday.

* The Australian government sees iron ore price in 2019 averaging $80 a tonne FOB, reflecting the full effect of supply disruptions — primarily in Brazil — and firm demand from China. It expects the price to decline to average $57 by 2021, as the seaborne market gradually returns to balance.

* Other steelmaking ingredients were lower, however, with Dalian coking coal down 1.7% to 1,222 yuan a tonne. Coke slipped 0.5% to 1,866 yuan.

* Shanghai stainless steel edged down 0.3% to 15,635 yuan a tonne.

($1 = 7.1210 yuan)

Reporting by Enrico dela Cruz; Editing by Aditya Soni

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