March 30, 2018 / 4:10 AM / 25 days ago

China steel, coking coal jump on end-of-quarter short covering

* Steel on track for first quarterly drop in years

* Coking coal set for biggest monthly loss since September

* Steel and steelmaking ingredients have been hit by worries about demand

BEIJING, March 30 (Reuters) - Prices of steel rebar, coke and coking coal jumped on Friday as bearish investors covered their short positions ahead of the end of the month and the first quarter, with rebar set for its first quarterly loss since 2015 amid worries about waning metal demand.

The most-traded coking coal contract on the Dalian Commodity Exchange was up 3.9 percent at 1,258 yuan ($200.68) per tonne at 0337 GMT, on track for its biggest one-day gain since Dec. 19.

Still, they have notched up an 11 percent loss this month, its biggest monthly loss since September and its first quarterly drop since the second quarter of last year.

End-of-quarter window dressing triggered a bout of short covering in rebar and its ingredients, analysts said. China is the world’s top steel producer.

Coke rose 1.2 percent to 1,783 yuan.

The market had been “oversold and is rebounding,” said Zhao Xiaobo, analyst at Sinosteel Futures in Beijing.

The most active rebar on the Shanghai Futures Exchange was 2.3 percent higher at 3,324 yuan a tonne but set for a 12 percent drop for the first quarter, its first quarterly decline since the fourth quarter of 2015.

The quarterly drop is led by a 17 percent decline so far in March.

Hefty tariffs slapped on steel imports by Washington and a growing trade dispute with the United States were worsening the outlook for steel, as inventories rise and a revival in demand after the week-long Spring Festival in February has failed to emerge.

Production has also increased after China’s pollution controls expired on March 15.

Inventories of rebar, used in construction, rose to their highest since April 2013 in the week ending March 16, according to data from SteelHome, but have declined some since then and stand at 9.5 million tonnes. SH-TOT-RBARINV

Dalian iron ore was down 0.11 percent at 436 yuan a tonne, but was still on course for its steepest quarterly drop since the third quarter of 2015 at 18 percent.

Shanghai iron ore port stocks have surged to more than 160 million tonnes, a record high and have doubled in size since late 2015. SH-TOT-IRONINV

$1 = 6.2893 Chinese yuan Reporting by Josephine Mason and Tom Daly; Editing by Christian Schmollinger

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