June 19, 2018, 8:09 pm
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Shanghai rebar rises on falling output

BEIJING- Chinese steel futures extended gains for a second session on Wednesday after data from an industrial association showed a dip in daily crude output in late May amid government efforts to curb pollution.

Crude steel production by major steel firms over May 20-31 fell from a peak of 2 million tons a day in mid-May, but was still at a historically high 1.95 million tons a day, data from China’s Iron & Steel Association showed.

Steel inventories at major steel firms also declined in late May, the data showed, falling by 2.09 million tons to 11.83 million tons from the previous May 10-20 reading. “Mills are ramping up output to cash out fat profit margins currently around 800-900 yuan ($140.50) a ton - and mills will continue to churn out products unless new policy comes out,” said Zhuo Guiqiu, senior analyst at Jinri Futures.

Utilization rates at steel blast furnaces across China fell for a third week last week to 41.41 percent, curbed by recent environmental inspections in major steelmaking regions such as Hebei and Jiangsu.

The most-active October rebar contract on the Shanghai Futures Exchange rose 1.2 percent to 3,870 yuan a ton in the morning session.

“Firm steel prices are supported by expectations of tight supplies under environmental policies,” said Zhuo, adding that the market is waiting for new property data due on Thursday for hints on steel demand in coming months. – Reuters 
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