January 8, 2019 / 2:40 AM / in 2 months

Dalian iron ore rises for 4th day on restocking demand

* Some steel mills restart as anti-smog measures eased

* Rebar margins at 300 yuan, HRC ekes out gains -analyst

* Mill utilisation rates fall to 64.23 percent -Mysteel

BEIJING, Jan 8 (Reuters) - Chinese iron ore prices climbed for a fourth session on Tuesday after hitting a 10-week peak a day earlier, supported by restocking demand at steel mills.

“Steel mills generally don’t have strong incentives to ramp up output due to thin margins and weak demand,” said Zhuo Guiqiu, analyst at Jinrui Futures.

“But some steel mills in Tangshan and Xuzhou city that restarted operations after emergency measures were lifted still need to replenish their stocks of raw materials.”

Authorities in some cities, including the steelmaking hubs of Tangshan and Xuzhou, asked mills to curtail output in December to make sure of meeting targets on cutting pollution for the year.

Some steel mills have reopened after the new year.

Profit margins for rebar have fallen more than 66 percent since late October to 300 yuan ($43.77) a tonne this week, while hot-rolled coil is only just profitable, according to data compiled by Jinrui Futures.

Zhuo expected more steel mills could schedule maintainance until the end of China’s week-long national new year holiday in mid-February.

Utilisation rates at steel mills across China fell for a seventh consecutive week last week as of Jan. 4 to 64.23 percent, the lowest level in 9-1/2 months, data tracked by Mysteel consultancy showed.

The most-active iron ore futures on the Dalian Commodity Exchange rose 0.8 percent to 513.5 yuan a tonne as of 0209 GMT.

However, steel futures eased after rising for three consecutive days, as investors hope for a direct stimulus package from Beijing.

Benchmark construction steel rebar prices dipped 0.1 percent to 3,493 yuan a tonne, while the hot-rolled coil contract edged up 0.5 percent to 3,399 yuan a tonne.

Despite current weak demand, ongoing trade talks between China and the United States helped to support market sentiment, as investors hope the two parties can reach a deal to halt the bruising trade war. ($1 = 6.8544 Chinese yuan renminbi) (Reporting by Muyu Xu and Dominique Patton; editing by Richard Pullin)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below