MANILA: Chinese steel prices traded near their lowest levels in months on Tuesday, weighed down by concerns over weaker demand in the world's top market for the building material.
Underlining the downward pressure on the Chinese economy amid slackening domestic demand and tit-for-tat tariffs with the United States, the yuan currency extended losses on Monday after its worst week in four months.
The most-traded January rebar on the Shanghai Futures Exchange closed flat at 3,868 yuan ($556) a tonne, having touched a 3-1/2-month low of 3,818 yuan on Monday.
Hot rolled coil was also little changed at 3,611 yuan, after hitting 3,561 yuan in the previous session, its weakest since late April.
"In particular, the lowering of prices by Baoshan Steel suggests that the seasonal downturn in demand is already upon us," ANZ analysts said in a note. "Supply-side issues had little impact on the market."
Major Chinese steelmaker Baoshan Iron and Steel said on Sunday it would cut domestic prices for key steel products for December delivery by as much as 200 yuan per tonne.
Construction activities in China typically slow down during winter, curbing demand for steel. This winter, China has allowed cities and provinces to set individual production curbs aimed at tackling smog, instead of repeating last winter's blanket restrictions.
Prices of raw materials for steelmaking retreated. Iron ore on the Dalian Commodity Exchange fell 1.7 percent to 511 yuan a tonne, coking coal dropped 1.4 percent to 1,333 yuan and coke slipped 0.4 percent to 2,300.50 yuan.
Spot iron ore for delivery to China fell 0.7 percent to $76.40 a tonne on Monday, according to SteelHome consultancy. <SH-CCN-IRNOR62>
Investors are awaiting a slew of Chinese data due out on Wednesday, including industrial output and retail sales.
"Any signs of weakness could precipitate further falls in prices," ANZ said.
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