BEIJING- Chinese stainless steel futures shed as much as 4 percent on Tuesday, following a big drop in prices of its raw material nickel, while poor downstream consumption due to the COVID-19 situation also dented sentiment.
The most-active stainless steel contract on Shanghai Futures Exchange, for June delivery, slipped 1 percent to 19,310 yuan ($2,958.57) a ton, after touching 18,720 yuan per ton earlier during the session.
The current stainless steel market can be described as “high cost, low profit, strong supply, and a with weak demand”, Huatai Futures analysts wrote in a note, adding that consumption is sluggish due to the COVID-19 outbreak.
Shanghai nickel futures slid as much as 6.8 percent to 205,880 yuan a ton, further weighing on stainless prices.
Other steel products on the Shanghai bourse were range-bound after Monday’s plummet, with construction material rebar, for October delivery, dipping 0.1 percent to 4,858 yuan a ton.
Hot rolled coils, used in the manufacturing sector, fell 0.6 percent to 4,934 yuan per ton.
China’s Premier Li Keqiang told a State Council meeting on Monday that the country should watch economic impact from domestic and external factors that have exceeded expectations, and policy measures need to be implemented in the first half to stabilize prices and economic fundamentals.
Benchmark iron ore futures on the Dalian Commodity Exchange, for September delivery, declined 0.9 percent to 823 yuan a ton, extending losses into the third straight session.
