Futures prices for steel rebar and hot-rolled coil rose for a second straight session on Friday, with falling inventories signalling prospects of firm demand.
Steel product inventory at Chinese traders declined for an eighth consecutive week in the week ended Thursday, down 220,000 tonnes from the previous week at 7.56 million tonnes, data compiled by Mysteel consultancy showed. That marked the lowest level since January 2009.
Stocks of construction steel rebar declined to 2.83 million tonnes from 2.87 million tonnes a week earlier, the data showed, while hot-rolled coil inventories slipped 0.6% to 1.8 million tonnes.
The most-traded rebar futures on the Shanghai Futures Exchange, for January 2020 delivery, closed 0.9% firmer at 3,620 yuan per tonne. It lost 1% for the week.
The hot-rolled coil contract rose 0.8% to 3,556 yuan per tonne.
Demand for steel products is expected to be firm this winter, three sources with knowledge of the market said, as likely warmer weather would be more favourable for constructions.
The weekly utilisation rates at steel mills in China rose to 65.88% by Nov.29 from 65.33% a week earlier, Mysteel data showed.
The most-actively traded iron ore futures on the Dalian Commodity Exchange, for January 2020 delivery, gained 0.3% to 646 yuan per tonne. The contract edged down 0.7% this week, retreating from two-week gains.
Other steelmaking ingredients were trading mixed, with Dalian coking coal inching higher 0.04% to 1,227 yuan per tonne, while Dalian coke declined 0.5% to 1,850 yuan per tonne.
Shanghai stainless steel futures, for February 2020 delivery, dropped 1.2% to 14,005 yuan per tonne.
China on Thursday reiterated its pledge to widen market access for foreign capital and lower non-tariff trade barriers, aiming to boost flagging trade as its economy slows and it engages in a trade war with the United States.