June 7, 2018 / 2:12 AM / 2 months ago

China steel futures hit 14-week high on environmental inspections

* Shanghai rebar touched highest level since March 1

* Central inspections in 6 regions until late-June

* Steel inventory at mills fell to 4-month low

BEIJING, June 7 (Reuters) - Chinese construction steel rebar futures rose to their highest in more than three months on Thursday, supported by environmental inspections across the country that helped to ease concerns about a glut and boosted market sentiment.

Teams of inspectors have been sent to six regions, including the steelmaking hubs of Hebei and Jiangsu provinces, to review environmental violations that were found during the checks last year.

The lastest inspections, which will last until the end of June, follow an earlier round of checks.

“Steel prices will show an uptrend as environmental inspections exert pressure on output,” said analysts from CITIC Futures.

The most actively traded October rebar contract on the Shanghai Futures Exchange gained 2.4 percent to 3,844 yuan ($600.91) a tonne as of GMT 0150. It earlier touched 3,867 yuan a tonne, a level last seen on March 1.

Daily crude steel output by major steel firms over May 10-20 continued to increase, reaching a fresh record at 1.97 million tonnes, data from China’s Iron & Steel Association showed.

Concerns of over-supply were also offset by declining inventory data. Stockpiles of rebar at Chinese traders fell to 5.32 million tonnes last week, down 5.9 percent from a week earlier, according to SteelHome data.

Steel stocks at mills also saw a clear decline. Total steel products inventory fell by 140,000 tonnes last week to 4.67 million tonnes as of June 1, the lowest level since early February, according to data from Mysteel consultancy.

Spot steel prices rose 0.3 percent to 4,340.13 yuan a tonne on Wednesday, Mysteel data showed.

Steelmaking raw materials also rose alongside steel prices.

Iron ore futures on the Dalian Commodity Exchange increased by 1.1 percent to 476 yuan a tonne.

Coke contract for September delivery rose 2.3 percent to 2,078.5 yuan, while coking coal futures gained 1.4 percent to 1,259 yuan a tonne. ($1 = 6.3903 Chinese yuan renminbi) (Reporting by Muyu Xu and Tom Daly; editing by Richard Pullin)

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