February 28, 2018 / 4:13 AM / 6 months ago

Chinese steel futures edge lower on weak demand

* Chinese steel futures hover near 3-mth top

* Steel demand seen improving in March

SHANGHAI, Feb 28 (Reuters) - Chinese steel futures ran out of steam, inching slightly lower on Wednesday, as demand remained weak, but the contract held near its highest in almost three months.

The most active rebar on the Shanghai Futures Exchange was 0.07 percent lower at 4,011 yuan a tonne by midday break, after rising for three straight sessions. It hit an intraday high of 4,047 yuan on Monday, the highest since Dec. 5.

“The expectation of extending output curbs boosted steel prices earlier this week, but physical demand hasn’t recovered yet after the winter slowdown, so prices are correcting,” said a futures analyst in Shanghai, declining to be named as he is not authorised to speak to media.

Steel demand is expected to pick up in March after faltering in winter season as cold weather hits construction activities and amid the Lunar New Year holiday.

The contract jumped more than 3 percent on Monday after China’s top steelmaking city said it would extend output curbs over the next eight months after the end of the winter heating season.

Weaker steel prices have weighed down raw materials.

Iron ore on the Dalian Commodity Exchange dropped 0.7 percent to 542 yuan a tonne, while coke fell 1 percent to 2,246 yuan a tonne.

Coking coal held steady at 1,417 yuan a tonne.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB dipped 21 cents to $79.15 a tonne on Tuesday, according to Metal Bulletin. (Reporting by Ruby Lian and Josephine Mason; Editing by Amrutha Gayathri)

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