Stainless steel futures in China extended gains into a seventh session on Wednesday as restocking demand from traders rose, while raw material supply disruptions due to suspension at Philippines' nickel mines also supported prices.
The most-traded June contract on the Shanghai Futures Exchange closed up 1.4% to 12,860 yuan ($1,822.48) per tonne, its highest level since Feb. 25. It soared as much as 4.3% to 13,225 yuan a tonne in afternoon trade.
"Some steel mills have limited their sales recently to support stainless steel prices which had been running low since the Lunar New Year holiday, stimulating traders' restocking demand," Fu Zhiwen, an analyst with Huatai Futures said, adding that the robust demand may not be sustainable as exports drop because of the coronavirus pandemic.
Fu also said supply disruptions in the Philippines could push prices of nickel ore in the next period.
Top nickel ore producers in the country suspended mining and export operations in a southern province last week to comply with the coronavirus-containment measures.
Nickel futures on the Shanghai exchange surged more than 5% since April 2.
Other steel futures on the Shanghai exchanged edged down, with October contracts for construction rebar and hot-rolled coil both ended down 0.6% to 3,373 yuan and 3,196 yuan per tonne, respectively.
Benchmark iron ore futures on the Dalian Commodity Exchange, for September delivery, rose 0.3% to 607 yuan per tonne.
Spot prices of iron ore with 62% iron content for delivery to China rose to $85.5 a tonne on Tuesday.