Chinese steel futures rose for a fourth session on Wednesday to hold near their highest in almost three months, but weak demand curbed gains. The most active rebar on the Shanghai Futures Exchange was 0.15 percent higher at 4,020 yuan ($635.37) a tonne. It hit an intraday high of 4,047 yuan on Monday, its highest since December 5.
Prices climbed back to gains after edging lower in morning trade, but the continued weakness in physical demand limited the upward momentum. "The expectation of extending output curbs boosted steel prices earlier this week, but physical demand hasn't recovered yet after the winter slowdown, so prices are correcting," said a futures analyst in Shanghai, declining to be named as he is not authorised to speak to media.
Steel demand is expected to pick up in March after faltering in winter season as cold weather hits construction activities and amid the Lunar New Year holiday. The contract jumped more than 3 percent on Monday after China's top steelmaking city said it would extend output curbs over the next eight months after the end of the winter heating season.
The prolonged production cut is expected to weaken appetite for raw materials. Iron ore on the Dalian Commodity Exchange dropped 0.55 percent to 543 yuan a tonne, while coke fell 1.32 percent to 2,239.5 yuan a tonne. Coking coal ended down 0.4 percent at 1,412.5 yuan a tonne.
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