China steelmaking ingredients jump on upbeat spot market prices

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Prices for steelmaking raw materials on China’s Dalian Commodity Exchange jumped on Wednesday to catch up with a strong spot market trend.

The most-traded iron ore futures on the Dalian bourse , for September delivery, surged as much as 4.8% to 1,192 yuan ($186.80) per tonne during morning session. They were up 3% at 1,171 yuan a tonne as of 0250 GMT.

Spot prices of iron ore with 62% iron content for delivery to China gained $6 to $206.5 a tonne on Tuesday, according to SteelHome consultancy.

Coking coal futures on the Dalian exchange rose 3.9% to 1,865 yuan a tonne and coke increased 2.8% to 2,593 yuan a tonne.

“In the short term, market is still trading on hopes of easing production curbs for steel products,” analysts with Huatai Futures wrote in a note.

Authorities in the steel hub Tangshan discussed relaxing production cuts at some mills, local media reported earlier this week.

Meanwhile, the coke market is in a backwardation, leaving further room for futures prices to rise, Huatai Futures added.

Steel prices on the Shanghai Futures Exchange also gained.

Construction rebar, for October delivery, rose 1.8% to 5,068 yuan per tonne.

Hot-rolled coils futures, used in the manufacturing sector, jumped 2.4% to 5,389 yuan per tonne.

The July contract for stainless steel futures inched up 0.3% to 16,050 yuan a tonne.

Officials from the country’s market regulator said on Monday that the government “attaches great importance” to commodities prices, regularly monitoring the trends of iron ore, steel, coal, crude oil and other products, and implementing targeted supervision.

($1 = 6.3813 Chinese yuan renminbi)

(By Min Zhang and Shivani Singh; Editing by Sriraj Kalluvila)

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