BEIJING: Chinese steel rebar and hot rolled coils futures traded within a tight range on Tuesday as consumption by the construction sector remained weak, with mills cutting production ahead of holidays.
Around 50 steelmakers have announced maintenance plans near the coming Lunar New Year holidays, with some producers planning to resume production in late-February or March, according to consultancy Mysteel.
However, a still sluggish real estate market offset the impact from reduced supply. China’s gross domestic product in the property sector fell 2.9% in the fourth quarter of 2021 compared with same period a year earlier, data from the National Bureau of Statistics showed.
The most-active construction rebar on the Shanghai Futures Exchange for May delivery inched up 0.3% to 4,599 yuan ($724.45) per tonne at close. Hot rolled coils futures, used in the manufacturing sector, edged 0.3% higher to 4,709 yuan a tonne.
There is limited room for further decline in steel prices supported by easing monetary policy that aims to stabilise the economy, GF Futures analysts said.
Stainless steel prices on the Shanghai bourse for February delivery jumped 1.7% to 17,970 yuan per tonne.
Benchmark iron ore futures on the Dalian Commodity Exchange ended up 1.1% at 715 yuan a tonne, recovering from losses in early session.
Spot prices of iron ore with 62% iron content for delivery to China fell $2.5 to $127.5 on Monday, data from consultancy SteelHome showed.
Brazilian miner Vale SA is resuming production after heavy rains and said its annual iron ore production guidance remained at 320-335 million tonnes. Meanwhile, Rio Tinto expects its 2022 iron ore shipments from the Pilbara region at 320-335 million tonnes, slightly weaker than expected due to labour market conditions. Dalian coking coal rose 3.7% to 2,312 yuan a tonne, tracking thermal coal futures on the Zhengzhou Commodity Exchange which surged as much as 6.8% in afternoon session.