March 14, 2018 / 3:21 AM / 3 months ago

Shanghai rebar sags to 4-mth lows amid strong output, high stocks

* China steel output up 5.9 pct in Jan-Feb

* Dalian coking coal, coke hit multi-week lows

* Spot iron ore at weakest since December

By Manolo Serapio Jr

MANILA, March 14 (Reuters) - Chinese rebar steel futures dropped for the ninth straight session on Wednesday, touching their weakest level in almost four months amid slow demand and hefty stockpiles of the building material in the world’s top consumer.

The longest losing streak for rebar futures since May-June 2017 comes the same day as government data showing that China’s crude steel output rose 5.9 percent to 136.82 million tonnes in January-February.

The most-active May rebar contract on the Shanghai Futures Exchange fell as far as 3,657 yuan ($579) a tonne, the lowest since Nov. 20. It was down 1 percent at 3,675 yuan by 0240 GMT.

Chinese steel mills are expected to ramp up production further after Thursday when winter curbs on producers in northern cities are lifted at the end of the winter heating season. Some cities, including top-producing Tangshan, plan to extend the output restrictions.

“After March 15, steel production in north China will increase, but I also expect demand to improve as the construction season gets underway,” said an iron ore trader in Beijing.

But hefty stockpiles and a slow recovery in consumption have weighed on steel prices, dragging raw materials iron ore and coking coal down as well.

Inventory of construction product rebar at Chinese traders reached 9.64 million tonnes on March 9, the highest since April 2013, data compiled by SteelHome consultancy showed. SH-TOT-RBARINV

China’s average daily crude steel output rose to 2.3 million tonnes in January-February from 2.16 million tonnes in December, the lowest in a year.

“Mills are ramping up production driven by solid profits,” said Qiu Yuecheng, an analyst at steel trading platform Xiben New Line E-commerce in Shanghai.

Tracking steel’s losses, raw material coke was down 1.6 percent at 1,968 yuan per tonne after touching a nearly two-month low of 1,960 yuan. Coking coal slipped 0.7 percent to 1,252.50 yuan a tonne, having touched a three-month trough earlier in the session.

Iron ore on the Dalian Commodity Exchange edged up 0.4 percent to 482 yuan a tonne, not far above Monday’s four-month low of 475.50 yuan.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB dropped 0.2 percent to $69.78 a tonne on Tuesday, the lowest since Dec. 11, according to Metal Bulletin. The spot benchmark has lost 4 percent this year.

$1 = 6.3148 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Tom Hogue

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