BEIJING: Steel rebar and hot-rolled coils futures in China edged lower on Wednesday as seasonal weak demand amid a slowing in construction activities dented prices in the world's biggest steel consumer.
The most actively traded construction steel rebar on the Shanghai Futures Exchange, for October delivery, inched down 0.06% to close at 3,566 yuan ($504.69) a tonne.
Hot-rolled coils, mainly used in the manufacturing sector, ended 0.45% lower at 3,567 yuan per tonne.
A private business survey showed that China's factory activity grew at a faster pace in June as the country recovers from the coronavirus health crisis, but exports and jobs are still under pressure.
Steel rebar, a key construction material, had jumped 9.3% in the second quarter, fuelled by Beijing's infrastructure stimulus and a resilient property market. However, prices are losing steam as rains and heat in the summer could hinder construction activities.
Benchmark iron ore futures on the Dalian Commodity Exchange, for September delivery, meanwhile, dropped 0.3% to 742 yuan a tonne.
"The rains in the southern area have a relatively big impact on demand of the steelmaking ingredient as well," said a Shanghai-based trader, adding that demand will recover after the rainy season.
The trader also noted that iron ore supplies in the coming months should remain stable, but the pandemic situation may affect shipments from Brazil.
The August contract of stainless steel futures on the Shanghai exchange rose 0.3% to 13,155 yuan per tonne.
Dalian coking coal closed 0.4% lower at 1,173 yuan a tonne and coke fell 0.9% to 1,871 yuan per tonne.
Spot prices of iron ore with 62% iron content for delivery to China, tracked by SteelHome consultancy, stood at $101.5 per tonne on Tuesday.
China's central bank will cut the re-discount and re-lending rates by 25 basis points as of July 1, in a move that will reduce funding costs for smaller firms and rural sectors.
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