China steel rebar soars to nearly 10-year high on output cut concerns

BEIJING/MANILA: Chinese steel rebar futures surged more than 5% on Wednesday to their highest level in about a decade, fuelled by concerns of production cut as the country plans to take more steps to protect the environment.

Besides the industry ministry's pledge to cut crude steel output this year, heavy pollution alerts issued in Hebei province and the upcoming annual parliament meeting will also affect steel products output in short term, SinoSteel Futures said in a note.

Top steel making Tangshan city recently urged to shut down seven blast furnaces by March 10, which might likely lower pig iron output by 5,000 tonnes a day, according to GF Futures.

The most actively traded rebar contract on the Shanghai Futures Exchange, for May delivery, rose 5.0% to 4,894 yuan ($757.13) per tonne as of 0330 GMT, after rising 5.6% to its highest since August 2011 earlier in the session.

Hot rolled coil futures, used in cars and home appliances, jumped 4.3% to hit a record high of 5,067 yuan.

Prices of steelmaking raw materials also gained.

Benchmark iron ore futures on the Dalian Commodity Exchange rose 2.9% to 1,166 yuan a tonne.

Dalian coking coal surged 6.0% to 1,522 yuan per tonne and coke increased 2.1% to 2,552 yuan per tonne.

Stainless steel futures on the Shanghai exchange fell 1.4% to 14,795 yuan a tonne.