MANILA: Chinese steel futures edged higher in early trade on Thursday, supported by a pick-up in demand from the construction sector, while iron ore traded in a narrow range after recent volatility.
The most-active May rebar contract on the Shanghai Futures Exchange rose as much as 0.7 percent to 3,734 yuan ($554.75) a tonne, after Wednesday's 0.2 percent gain.
Gains were however limited as investors awaited whether winter production curbs would be lifted or eased.
"The weather is getting warmer, so the seasonal steel demand, I believe, has (set in) already. Construction works are happening here and there, and even cement prices are also rising," said a Shanghai-based trader.
Hot rolled coil, used in automobiles and household appliances, climbed as much as 1.3 percent to 3,714 yuan.
"With the expected expiry of winter restrictions on production... we could see output begin to ramp up," said Edward Meir, a consultant at INTL FCStone Financial Inc.
Despite the production curbs, Chinese steel production in February rose by 9.2 percent from a year earlier, after a 4.3 percent increase in the previous month, figures from the World Steel Association showed.
Steelmaking raw materials also rose on Thursday, with the most-traded coking coal contract on the Dalian Commodity Exchange rising by 0.9 percent to 1,240 yuan a tonne. Coke inched up 0.7 percent to 1,976 yuan.
The May iron ore contract, the most active on the Dalian exchange, swung between losses and gains in a narrow range of 614.5 yuan to 607 yuan a tonne, compared with Wednesday's close of 613.5 yuan.
"Investors remain on edge in the iron ore market as they await guidance from Vale regarding recent disruptions to its Brazilian mines," ANZ said in a note.
Brazilian iron ore miner Vale on Wednesday announced a series of writedowns and provisions related to the Brumadinho tailings dam collapse that killed some 300 people two months ago, saying there would be an effect on future results.
The company's quarterly results provided little information about the ultimate cost of its second deadly dam disaster in less than four years.
"Vale didn't provide any guidance in its quarterly production report. But it indicated that it had shut operations producing almost 93mt/y (93 million tonnes a year) in the wake of January's dam disaster," ANZ said.
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