BEIJING – Chinese steel futures rose for a second straight session on Wednesday as more cities in the northern part of the country issued pollution alerts, curbing production at mills.
Seven cities in the province of Shandong and some in Shanxi issued yellow or orange smog alerts this week on expectation of heavy pollution, following similar steps by the top steelmaking city Tangshan and the central province of Henan.
The most-active construction steel rebar contract on the Shanghai Futures Exchange, for January 2020 delivery, edged up 0.2 percent to 3,312 yuan a ton.
Futures for hot-rolled coil steel, used in cars and home appliances, also for January delivery, closed up 0.4percent at 3,315 yuan per ton.
“Despite increasing local government debts, infrastructure investment in China has been tepid,” Tianfeng Futures wrote in a note sent to customers on Wednesday.
The futures house expects the main support for steel in the fourth quarter lies in real estate market, and does not see weakening trend of crude steel demand in short term, it said.
Steel inventories in China fell to 10.45 million tons in the week to Oct.17, the lowest since the week ended Jan. 25, according to data compiled by Mysteel consultancy. – Reuters