March 7, 2018 / 2:47 AM / 15 days ago

Shanghai rebar steady after 3-day drop, iron ore off one-month low

    * Expectations of construction activity pick-up in China
    * Winter output restrictions to end on March 15

    By Manolo Serapio Jr
    MANILA, March 7 (Reuters) - Chinese steel futures steadied
on Wednesday after a three-day decline that pulled prices down
to one-week low amid expectations a pickup in construction
activity will spur demand for the building material.
    Construction activity in top steel consumer China is only
resuming gradually after last month's Lunar New Year holiday and
steel stocks have risen to nearly one-year highs as traders look
ahead to a pickup in demand.
    The period after the Chinese New Year is usually the
briskest for its construction sector, a big consumer of steel,
following the winter lull.
    The most-active rebar on the Shanghai Futures Exchange
         was nearly flat at 3,956 yuan ($625) a tonne, as of
0227 GMT, but above Tuesday's one-week trough of 3,919 yuan.
    Construction projects are starting to resume in some
districts in Beijing and there are expectations for strong steel
demand in the provinces of Shandong and Anhui, said a
Beijing-based trader.
    Production restrictions on most Chinese cities covered by
Beijing's winter curbs will end on March 15. While some cities,
including top steel-producing Tangshan, have declared they will
continue with output limits after mid-March, most mills are
looking forward to maximising output. 
    China's infrastructure push and environmental crackdown had
helped increase margins at steel producers, which this year
remain well above the five-year average.             
    "Elevated steel margins encourage steel mills to boost
output, increasing demand for iron ore and coking coal,"
Commonwealth Bank of Australia analyst Vivek Dhar said in a
    Dhar said China's plan to close another 30 million tonnes of
steel capacity this year would still leave about 200 million
tonnes of spare capacity that "gives enough headroom for Chinese
steel production to rise".
    The most-traded May iron ore contract on the Dalian
Commodity Exchange           was up 0.3 percent at 521.50 yuan a
tonne, recovering from a one-month low of 515.50 yuan touched
    Coking coal          slipped 0.2 percent to 1,376.50 yuan
per tonne and coke          was flat at 2,185.50 yuan.    
    Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
fell 1.2 percent to $76.07 a tonne on Tuesday, its weakest since
Feb. 6, according to Metal Bulletin, tracking the losses in
Chinese futures in the previous session. 

    ($1 = 6.3274 Chinese yuan)

 (Reporting by Manolo Serapio Jr., Editing by Sherry
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