Chinese steel futures drop on lean demand

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) and official data released last week both showed manufacturing activities contracted in March.

A regular state council meeting chaired by Premier Li Keqiang said on Wednesday the government would flexibly use multiple monetary policies in a timely way to support the real economy.

The most-traded steel rebar futures, used as construction material, on the Shanghai Futures Exchange for October delivery fell 1.2% to 5,064 yuan ($796.03) a tonne as of 0320 GMT.

Hot rolled coils, used in cars and home appliances, slipped 1.2% to 5,216 yuan per tonne. The country’s auto industry association expected China’s auto sales to plunge 11% in March on an annual basis. Stainless steel futures on the Shanghai bourse, for May delivery, dipped 0.5% to 20,435 yuan a tonne.

Steel prices were also tracking falling raw material futures prices on the Dalian Commodity Exchange. Benchmark iron ore futures, for September delivery, declined as much as 3.5% to 896 yuan a tonne, retreating from an over 4% jump in the previous session.