BEIJING: Steel prices on China’s Shanghai Futures Exchange were range-bound in early trade on Wednesday as investors sit tight amid the still sluggish downstream demand and an outlook for recovering production next month.

Seasonal steel consumption is weak and speculative trading demand is extremely low, analysts with Huatai Futures wrote in a note, adding that there is limited room for gains in steel rebar while production resumption at mills in January also weighs on prices of flat products. Still, market sentiment was somewhat supported by Beijing saying it would appropriately front-load infrastructure investments to stabilise the economy.

The most-traded construction rebar futures on the Shanghai bourse, for May delivery, edged down 0.5% to 4,306 yuan ($675.82) a tonne as of 0258 GMT.

Shanghai hot rolled coils futures, used in the manufacturing sector, inched 0.2% higher to 4,449 yuan per tonne and stainless steel prices increased 0.4% to 16,870 yuan a tonne. An official from the China Iron and Steel Association said on Tuesday that the country’s steel production is expected at around 1.03 billion tonnes. Prices for steelmaking ingredients on the Dalian Commodity Exchange were mixed. Benchmark iron ore futures declined 2.3% to 661 yuan a tonne, tracking the drop in spot 62% iron ore, which fell $3.5 to $123 a tonne on Tuesday, according to SteelHome consultancy.

Analysts with SinoSteel Futures anticipated iron ore prices will further drop in 2022 due to China’s steel output controls and stable supplies from major miners.

Dalian coking coal futures advanced 0.2% to 2,162 yuan a tonne while coke prices dipped 0.2% to 2,909 yuan per tonne.