China Steel Futures Rise As Inventories Decrease And Raw Materials Fluctuate

Chinese steel futures rose on Friday, raising concerns amid declining steel inventories at the world's largest material producer.

Rebar stocks at traders this week fell by 410,000 tons to 5.66 million tons by Friday, which was noted in early February, according to data from the consulting company Mysteel.

The total stock of steel products, including rebar, wire rod, hot rolled coil, cold rolled coil and steel plate, fell 6.4 percent to 11.33 million tonnes.

The most active rebar futures on the Shanghai Futures Exchange rose 0.5 percent to 3,565 yuan ($ 558.14) a tonne.

Spot steel prices fell 0.3 percent to 4,265.25 yuan a tonne on Thursday, data from Mysteel showed.

“The steel and iron ore market is very sensitive to changes in stocks. Prices may fluctuate as the destabilizing impulses have not completely disappeared ... but seasonal demand for steel products is weakening, ”analysts from Orient Futures note.

On Thursday, the European Commission opened an investigation into the production of hot rolled steel sheet imported from China, stepping up pressure on steel exports in the country after the United States this week imposed heavy tariffs on Vietnamese steel originating from China.

The Dalian iron ore deal for September deliveries erased its early profits, dropping 0.7% to 454.5 yuan a tonne, posting its worst weekly results in nine weeks.

Iron ore stocks at Chinese ports have been falling over the past three weeks, but the overall decline is only 0.8 percent. As of last Friday, it was 158.98 million tons, according to SteelHome data. Coking coal on the Dalian Commodity Exchange was down 0.5 percent to 1,175.5 yuan a tonne. The price of coke in September increased by 0.2 percent to 1.979 yuan per tonne.