Steel futures in China fell due to lower seasonal demand

Construction rebar and hot rolled coil futures in China fell on Tuesday due to weak downstream demand, while raw material prices rose, primarily for coke, following the announcement of production control in Shandong province.

The data showed that apparent consumption of the five major steel products compiled by consulting firm Mysteel fell 4.7% to 10.97 million tonnes last week from a week earlier.

“Gradually the off-peak season has come, consumption has dropped significantly due to high temperatures and rains in the southern regions, and the decline in stocks (steel) is coming to an end,” analysts at Chang An Futures wrote.

The best-selling steel bar on the Shanghai Futures Exchange for October delivery fell 1.5% to 5168 yuan ($ 807.44) a tonne as trading resumed after a Chinese public holiday on Monday.

Hot rolled coil futures, used in the manufacturing sector, were down 1.9% to RMB 5,436 a tonne.

Stainless steel futures for July delivery rose 0.5% to RMB 16,390 a tonne.

However, steel ingredient prices recovered from early trading losses despite lower weighted utilization rates at factories.

Blast furnace utilization rates at 163 plants across China fell to 80.69% as of June 11, the lowest since mid-May, according to Mysteel.

Control futures for iron ore on the Dalian Commodity Exchange for September delivery rose 0.9% to 1,226 yuan a tonne.

Spot prices of 62% iron ore for SH-CCN-IRNOR62 shipment to China rose $ 7 on Tuesday to $ 220.

Dalian coking coal futures rose 1.3% to 1956 yuan a tonne.

Coke futures jumped 2.3% to 2,725 yuan a tonne.

China's Shandong province has pledged to limit coke production to 32 million tonnes in 2021 and cut its coke capacity to 33 million tonnes from 46 million tonnes.