May 29, 2018 / 7:27 AM / a month ago

UPDATE 1-China steelmaking materials rebound from multi-week lows as rebar rises

* Rebar stocks at Chinese traders down over 40 pct from March

* Prices of rebar, steel raw materials hit one-week high

* Coke jumps nearly 4 pct, coking coal up 2.7 pct (Updates prices)

By Manolo Serapio Jr

MANILA, May 29 (Reuters) - Prices of steelmaking raw materials in China recovered from multi-week lows on Tuesday, propped up by gains in construction steel product rebar as traders’ stockpiles dropped to the lowest since February, underlining firm demand.

Rebar inventories at Chinese traders reached 5.65 million tonnes on Friday, down more than 40 percent from a five-year high in mid-March, according to data compiled by SteelHome consultancy. SH-TOT-RBARINV

The most-active rebar on the Shanghai Futures Exchange closed up 1.4 percent at 3,635 yuan ($567) a tonne, after earlier peaking at a one-week high of 3,650 yuan.

The price of rebar has risen nearly 16 percent from late March, spurred by a seasonal recovery in China’s construction activity that pushed mills to ramp up output after winter production curbs aimed at fighting smog were lifted in mid-March.

Weekend data showed profits at Chinese iron and steel processing firms surged 260 percent in April, fueling a 22 percent spike in overall earnings at the country’s industrial companies.

Firmer steel futures also lifted prices of its raw materials to one-week highs after they dropped to multi-week lows on Monday.

Iron ore traded on the Dalian Commodity Exchange climbed 2.3 percent to 464.50 yuan a tonne, recovering from Monday’s trough of 448.50 yuan, its weakest since April 18.

Despite rising stocks of iron ore at China’s ports, some steel mills say they are only adequately stocked.

“We don’t overbuy before so the glut doesn’t affect us,” said an official at a steel producer in southern China, who added that his company’s typical iron ore inventory is about 1 to 1-1/2 months’ worth of usage.

Iron ore stocks at China’s major ports stood at 160.58 million tonnes on Friday, up 1.6 million tonnes from the previous week and not far from the record 161.68 million tonnes reached in April, SteelHome data showed. SH-TOT-IRONINV

“The port stocks are mostly low-grade material and we mainly purchase high grade,” the mill official said.

Coking coal and coke futures were the day’s outperformers. Coking coal rose 2.7 percent to 1,218.50 yuan a tonne and coke jumped 3.9 percent to 2,059.50 yuan.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB was little changed at $63.89 a tonne on Monday, according to Metal Bulletin. ($1 = 6.4123 Chinese yuan) (Reporting by Manolo Serapio Jr., Editing by Sherry Jacob-Phillips and Sunil Nair)

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