Chinese steel futures rise on pollution control pledge, raw materials extend losses

The Ministry of Ecology and Environment said China aims to cut PM2.5 by an average of 4% on an annual basis in key pollution control cities during this autumn-winter season, and will arrange staggered production at steel mills.

Production of five main steel products - rebar, hot-rolled coils, wire rod, cold rolled coils and medium plates - at steelmakers tracked by Mysteel consultancy rose 4.9% this week to 9.2 million tonnes. However, it was well below the 10.7 million tonnes weekly output in the year-earlier period.

Construction-used rebar on the Shanghai Futures Exchange, for January delivery, ended up 0.8% at 4,646 yuan ($727.14) per tonne.

Hot-rolled coils on the Shanghai bourse rose 0.9% to 5,003 yuan a tonne and stainless steel futures edged 0.6% higher to 19,080 yuan per tonne.

Prices of steelmaking raw materials, however, dropped further on weak sentiment amid Beijing’s crackdown on coal prices.

The country’s top economic planner said initial results after its recent investigation into coal producers showed there was still room for further adjustment of coal prices.