China Steel, Iron Ore Retreat again as Factory Activity Shrinks

  • Wednesday, May 4, 2016
  • Source:ferro-alloys.com

  • Keywords:Iron Ore
[Fellow][Ferro-Alloys.com]Steel and iron ore futures in China fell more than 4 per cent on Tuesday, again recoiling after big gains in the prior session as Chinese steel producers boost output and exchanges keep a closer eye on commodity markets after recent wild swin...
[Ferro-Alloys.com]Steel and iron ore futures in China fell more than 4 per cent on Tuesday, again recoiling after big gains in the prior session as Chinese steel producers boost output and exchanges keep a closer eye on commodity markets after recent wild swings.
 
China's securities regulator on Friday urged commodity futures exchanges to curb excessive speculation following a surge in prices that has sparked fears markets were heading for a dangerous boom-and-bust cycle.
 
The most-traded rebar, a construction steel product, on the Shanghai Futures Exchange was down 4.3 per cent at 2456 yuan a tonne by the midday break, just off the session low of 2454 yuan.
 
Rebar climbed more than 20 per cent in April in its biggest monthly gain ever, with volume on the most-active contract hitting a record 1.4 billion tonnes, enough to build San Francisco's Golden Gate Bridge more than 15,000 times over.
 
China's crude steel output hit a record high of 70.65 million tonnes in March and analysts and traders expect production to have remained strong in April as a rally in steel prices spurred mills to lift output. The April data will be released later this month.
 
"Because production has returned ... some downward risk will also drive price movement in the short term," said Kevin Bai, analyst at CRU consultancy in Beijing.
 
"Therefore, I think prices will remain volatile in the next month or so."
 
Also weighing on sentiment, a private survey on Tuesday showed activity at China's factories shrank for the 14th straight month in April as demand stagnated.
 
A separate Chinese government survey on Sunday showed activity in China's manufacturing sector expanded for the second month in a row in April but only marginally.
 
But Bai said rising real estate investment could continue to support Chinese steel prices this month as a seasonal pick-up in construction demand is expected to persist.
 
The inventory of steel products held by Chinese traders, including rebar, dropped 3 per cent last week from the previous week, said Bai, reflecting firm consumer demand.
 
Tuesday's losses in steel spread to raw materials iron ore and coking coal. On the Dalian Commodity Exchange, the most-traded September iron ore was down 4.5 percent at 435.50 yuan a tonne.
 
Dalian coking coal slid 5.9 per cent to as low as 715 yuan a tonne before slightly trimming losses to stand at 717 yuan by midday. Coke slipped 2.3 per cent to 1065.50 yuan a tonne.
 
Rebar and all the three steelmaking commodities rebounded sharply on Friday to end April with big gains as robust construction demand spurred buying.(Reuters)
 
Article from Internet for Reference 
 

 

  • [Editor:Sophie]

Tell Us What You Think

please login!   login   register
  • Buy & Sell

 
Please be logged in to comment!