Robust demand, supply curbs lift China steel prices to new highs

    207

    Chi na steel prices jumped to record highs on Tuesday, boosted by strong domestic demand and concerns over supply curbs in the world’s biggest producer and exporter of the construction and manufacturing material.

    Construction steel rebar on the Shanghai Futures Exchange scaled the highest level on record, or since 2011, with the benchmark May contract gaining as much as 2.4 percent to 5,200 yuan ($793.42) a ton.

    Shanghai prices of hot-rolled coil, steel used in car bodies and home appliances, hit the loftiest since 2014, data available on Refinitiv Eikon showed, with the benchmark May contract rising 1.3 percent to 5,589 yuan a ton.

    Production restrictions in China’s top-steelmaking city of Tangshan during the peak demand season have brought down stocks at commercial warehouses and created a “bullish atmosphere” for the market, Sinosteel Futures analysts said in a note.

    Last Thursday, China’s state planner and industry ministry announced planned inspections to check on implementation of steel capacity cuts in the country’s production hub and reiterated its intention to curb output further in 2021 to reduce emissions.

    In a meeting on April 3, the Tangshan government asked mills to speed up emission reduction and warned of suspension if they fail to meet the level of progress required by June 15, and vowed to introduce specific emission requirements for the sector soon.

    Benchmark prices for key steelmaking ingredients fell, with iron ore on the Dalian Commodity Exchange down 0.6 percent to 971 yuan a ton by 0300 GMT, while the Singapore Exchange’s most-active April contract slipped 0.2 percent to $165.80 a ton.

    Spot iron ore from top supplier Australia for delivery to China traded at $168 a ton on Friday, latest data available from SteelHome consultancy on Refinitiv Eikon showed.

    Dalian coking coal edged up 0.1 percent, while coke slipped 0.1 percent.

    Shanghai stainless steel advanced 0.6 percent.