MANILA: Chinese stainless steel futures jumped to their highest in more than three months on Wednesday, boosted by high input costs and optimism over demand, while iron ore remained pressured by Beijing’s sustained efforts to stem any market irregularities.
The most-traded stainless steel for March delivery on the Shanghai Futures Exchange rose as much as 3.7% to 19,355 yuan ($3,052.45) a tonne, its highest since Oct. 27.
Shanghai stainless steel has gained 12% this year, outshining other commodities in top metals consumer China’s ferrous complex, as prices of key raw material nickel rose on tight supply concerns. Replenishment demand from Chinese downstream enterprises after this month’s Spring Festival is expected to support stainless steel prices, Huatai Futures analysts said in a note.
Seasonally-tight supply of nickel ore from the Philippines, China’s biggest source of the material, has also provided support to nickel prices, they said. In contrast, the most-active May iron ore on China’s Dalian Commodity Exchange fell a further 4.4% to 696 yuan a tonne, its weakest since Jan. 18.
Chinese regulators will meet with iron ore traders on Feb.17 in an effort to ensure market stability, following a recent price rally. Dalian iron ore has shed 16% since hitting a 5-1/2-month peak last week.
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