Chinese steel futures track raw material prices higher

The most-actively traded construction rebar on the Shanghai Futures Exchange, for October delivery, gained 2.9% to 5,304 yuan ($821.15) per tonne at close.

Hot-rolled coils, used in cars and home appliances, jumped 3.2% to 5,604 yuan a tonne.

The August contract for stainless steel on the Shanghai bourse was up 2.2% at 16,880 yuan a tonne.

“Futures are stronger than spot prices as currently market has a relatively strong expectation on production restrictions,” GF Futures wrote in a note.

“Considering spot prices are supported by costs... (steel) will remain fluctuating at high levels,” it added.

Iron ore futures on the Dalian Commodity Exchange, for September delivery, rose as much as 3.7% to 1,242 yuan per tonne. They ended 2.8% higher at 1,231 yuan a tonne.

Spot prices of iron ore with 62% iron content for delivery to China, compiled by SteelHome consultancy, rose by $3.5 to $221 on Monday.