China steel, iron ore trim gains ahead of 70th anniversary holiday

• The most-traded construction steel rebar on the Shanghai Futures Exchange rebounded after three losing sessions, gaining 1.1% to close at 3,470 yuan ($486.83) per tonne. It was up as much 4.3% in the session.
• Chinese markets will be closed from Tuesday, when the nation marks the 70th anniversary of the People's Republic, until Oct. 7.

MANILA: China's steel and iron ore futures perked up on Monday after the country's central bank vowed to step up efforts to lift a slowing economy, though gains were pared ahead of a long holiday.

The most-traded construction steel rebar on the Shanghai Futures Exchange rebounded after three losing sessions, gaining 1.1% to close at 3,470 yuan ($486.83) per tonne. It was up as much 4.3% in the session.

Hot-rolled steel coil, used in cars and home appliances, gained 0.4% to 3,463 yuan a tonne.

Chinese markets will be closed from Tuesday, when the nation marks the 70th anniversary of the People's Republic, until Oct. 7.

Many Chinese steel mills were ordered to shut or limit operations last week to curb pollution ahead of the Oct. 1 celebrations in Beijing.

China will "continue to implement a prudent monetary policy and increase the strength of counter-cyclical measures", the central bank said in a statement on Sunday.

"We expect more policy easing/stimulus measures, including medium-term lending facility rate and reserve requirement ratio cuts through the rest of this year to stabilise market sentiment and bolster growth," Nomura analysts said in a note.

"We believe that, faced with increasing difficulties, Beijing towards end-2019 may be compelled to increase credit growth and ease its tightening measures on property markets again," it said.

While spot markets for steel products and raw materials were quiet ahead of the holiday, sentiment got a further boost from a private business survey showing domestic factory activity expanded at the fastest pace in 19 months in September.

Singapore-based steel and iron ore data analytics firm Tivlon Technologies expects demand for steel in China to pick up in the coming weeks, which may prompt increased purchases of raw material iron ore.

"Tivlon analytics is suggesting market participants positioning for upside of the ferrous market after the national holiday," said Tivlon data scientist Darren Toh.

FUNDAMENTALS

* The most-traded iron ore on the Dalian Commodity Exchange  rose for a third straight session, closing up 2.5% at 655.50 yuan a tonne and posting a monthly gain of nearly 10%, following a 23.3% drop in August. Iron ore on the Singapore Exchange was up 3% at $88.55 a tonne in afternoon trade.

* Spot cargoes of benchmark iron ore with 62% iron content for delivery to China <SH-CCN-IRNOR62> were steady at $92.50 a tonne from Wednesday to Friday last week amid sluggish trading ahead of the holiday.

* The Australian government sees iron ore price averaging $80 a tonne FOB in 2019, reflecting the full effect of supply disruptions and firm demand from China, and $57 by 2021, as the seaborne market gradually returns to balance.

* Other steelmaking ingredients ended barely changed, with Dalian coking coal at 1,244 yuan a tonne and coke  at 1,873 yuan.

* Shanghai stainless steel edged up 0.2% to 15,700 yuan a tonne.