May 11, 2018 / 10:23 AM / 2 months ago

UPDATE 1-China's steel up on hopes of higher demand; coke rallies on cuts

(Updating prices, adding coke detail)

BEIJING, May 11 (Reuters) - China’s iron and steel prices rose on Friday amid growing optimism about demand as inventories of metal continued to fall and buying from the real estate market strengthened, while coke rallied as investors braced for output cuts in Jiangsu province.

* “Chinese steel demand continues to beat expectations. Real estate investment and housing starts are picking up, while infrastructure spending remains elevated,” said ANZ in a research note.

* “After some restocking in late March ahead of a key maintenance period, the scene is set for steel mills to re-enter the market.”

* Stockpiles of steel rebar SH-TOT-RBARINV have fallen almost a third since mid-March, when inventories were at a multi-year peak at 9.79 million tonnes, dropping to 6.71 million tonnes as of May 4, data compiled by SteelHome consultancy showed.

* The most-active construction rebar futures on the Shanghai Futures Exchange ended up 2.28 percent at 3,675 yuan ($580.32) a tonne.

* Iron ore futures on the Dalian Commodity Exchange closed up 2.77 percent at 483 yuan a tonne after hitting 487 yuan earlier in the session, its highest since March 19.

* Steelmaking raw materials have been boosted by hopes of restocking by mills amid expectations of higher production after a prolonged winter.

* The outlook for iron ore has picked up in recent weeks, ANZ said, citing recent Chinese economic data.

* The bank said an expected surplus in 2018 has all but evaporated, as it maintained its view that prices have limited downside. It expected prices to push back towards $69 per tonne over the next few months.

* A prolonged mine outage in Brazil and falling exports from India and Sierra Leone will also cut supplies, it said.

* Iron ore for delivery to China closed at $66.83 .IO62-CNO=MB on Thursday.

* Coke futures jumped almost 4 percent amid expectations of further output cuts as China intensifies its years-long war on pollution.

* It ended the day at 2,066.5 yuan, up 3.6 percent after shooting to as high as 2,077.5 yuan, its highest since March 8 earlier in the session.

* On Friday, Reuters reported China’s Jiangsu province is considering shutting small coke plants along the Yangtze River and near Lake Tai. ($1 = 6.3442 Chinese yuan) (Reporting by Josephine Mason; editing by Richard Pullin and Sunil Nair)

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