MANILA: China's steel futures rose on Wednesday on optimism about demand prospects in the world's top metals consumer, while low domestic stockpiles also lent support.
Construction steel rebar on the Shanghai Futures Exchange closed 1.8% higher at 3,702 yuan ($527.61) a tonne, advancing for a fifth straight session.
Hot-rolled coil, used in cars and home appliances, climbed 1.9%, while stainless steel gained 0.8%.
Steel prices remained resilient despite the seasonal weakness in downstream demand, particularly for rebar, as flooding in southern China and heavy rains across the country slowed construction activities.
"The market sentiment remains bullish, dictated by strong stock prices," said Richard Lu, senior analyst at CRU consultancy in Beijing.
Hopes of an economic recovery and regulatory and retail support helped China stocks extend gains into a seventh session on Wednesday.
"It looks like market participants are still confident on macro-economic growth in the second half, and many think the short-term weather disruption will be compensated later," Lu said. China's steel inventories remain low despite the build-up seen over the last two weeks. Rebar and hot-rolled coil stockpiles have fallen more than 40% from this year's peak, SteelHome consultancy data showed.
Strong steel futures and supply concerns lifted iron ore higher, with the steelmaking ingredient up 3.1% on the Dalian Commodity Exchange and advancing 3.4% in afternoon trade on the Singapore Exchange.
Coking coal gained 0.6% and coke jumped 1.8%.
Orders for infrastructure materials and equipment have helped China's industrial output recover, but analysts warned that further expansion will be hard to attain without stronger broad-based demand and exports.
China's Nanjing Iron & Steel Co Ltd has completed its first blockchain-backed trade in iron ore, booking a $16.87 million shipment from a joint venture of miner Rio Tinto.