Chinese steel futures were higher on Friday, while news that China's largest steel city is looking to expand production after winter ends, even as the government says it has no plans.
China has ordered steel mills to cut production in half from November 15 to March 15 as part of the country's campaign against air pollution.
The most active rebar contract for May delivery on the Shanghai Futures Exchange rose 0.2 percent to 3949 yuan ($ 629) a tonne.
The potential scaling up of steel production in Tangshan “would mean a much tougher market,” said Daniel Meng, an analyst at CLSA in Hong Kong. Tangshan produces 12 percent of China's steel, and a quarter cut in production means a 3 percent reduction in national production, Meng said.
May's most traded iron ore contract on the Dalian Commodity Exchange climbed 1.3 percent to 514.50 yuan a tonne, rebounding from Thursday's daily low of 503.50 yuan, the weakest since December 15.
“I think it was just a technical restoration,” said an iron ore trader in Shanghai. "But we will see prices under pressure again as we get closer to the holidays when trading activity slows down." Many workers in China began returning home this week, he said, ahead of the week-long Lunar New Year holiday, which kicks off on February 15.
Steel and iron ore contracts recover in price
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Azovpromstal® 2 February 2018 г. 09:18 |
