May 30, 2018 / 4:04 AM / 23 days ago

Shanghai steel hits 1-1/2-week high on firm Chinese demand

* Falling steel stocks in China points to solid consumption-trader

* Dalian iron ore steady after hitting one-week top

By Manolo Serapio Jr

MANILA, May 30 (Reuters) - Chinese steel futures climbed to their highest in nearly two weeks on Wednesday, supported by strong demand in the world’s top consumer where traders’ steel stockpiles have fallen more than 10 percent from March.

The strength in steel prices also lifted iron ore futures to a one-week high, before steadying at the midday break, and comes as other commodities were under pressure from a deepening political crisis in Italy, cutting appetite for many risky assets from oil to copper.

The most actively traded October rebar contract on the Shanghai Futures Exchange was up 0.9 percent at 3,644 yuan ($567) by midday, after peaking at 3,657 yuan in morning trades, the highest since May 18.

The price of rebar, a construction steel product, has risen 16 percent from late March.

“Things are very, very solid in China,” said a Singapore-based trader. “Every week the drawdown in steel stocks is very healthy.”

Stocks of rebar at Chinese traders stood at 5.65 million tonnes on Friday, down 42 percent from a five-year high in mid-March, according to data compiled by SteelHome consultancy. SH-TOT-RBARINV

Construction activity in China is expected to be brisk this year as the government focuses on infrastructure building in its rural areas, the Singapore trader said.

The most-traded September iron ore on the Dalian Commodity Exchange was last down 0.1 percent at 459 yuan a tonne, after earlier scaling a one-week high of 469 yuan.

Coke jumped 1 percent to 2,046 yuan per tonne and coking coal slipped 0.6 percent to 1,206.50 yuan.

$1 = 6.4253 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Sunil Nair

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