China steel futures extend gains

BEIJING: Chinese steel rebar and hot rolled coils futures surged over 6% on Tuesday, as production curb worries and peak season demand overshadowed a fee adjustment by exchanges.

The state planner had urged local governments to complete “self-inspection” for their steel projects and full-year output cut plan by mid-May, before it conducted on-site checks in June and July.

The announcement, seen as a curtain raiser for more crude steel production curbs, came as China’s factory gate prices expanded at the fastest pace in more than three years.

“Current demand for construction materials are still robust... domestic hot rolled coils prices are also driven by a surge in overseas market,” analyst with CITIC Futures wrote in a note.

The most traded construction rebar on the Shanghai Futures Exchange, for October delivery, rose as much as 6.7% to 6,208 yuan ($966.38) a tonne, extending gains for a sixth straight session. It was up 3.4% to 6,015 yuan as of 0330 GMT.

The contract for hot rolled coils, used in the manufacturing sector, opened up more than 4% and hit as much as 7.3% to 6,568 yuan per tonne during the session, rallying for a fourth straight session.

Benchmark iron ore futures on the Dalian Commodity Exchange, for September delivery, edged up 0.4% to 1,291 yuan a tonne after hitting a 10% upper limit on Monday. Spot prices of iron ore with 62% iron content for delivery to China rose $19 to $231 a tonne on Monday, data from SteelHome consultancy showed.