Chinese steel futures rose on Monday as improving profit margins in the world's top producer of the manufacturing and construction material buoyed sentiment, helping lift prices of key ingredient iron ore as well.
May construction steel rebar on the Shanghai Futures Exchange climbed 1.6% to 4,793 yuan ($736.82) a tonne by 0330 GMT.
May hot-rolled coil, steel used in household appliances and car bodies, was up 2.3% at 4,995 yuan a tonne, after earlier rising to 5,038 yuan, near a record peak of 5,088 yuan hit on March 3.
"The strong performance of finished product prices has caused the profitability of steel mills to rebound," analysts at Sinosteel Futures said in a note.
A recent decline in crude steel output and an expected boost in Chinese demand this month, after the Lunar New Year holidays in February, have pushed prices higher, they said.
"Data last Friday showed that the profitability of 247 steel mills nationwide was 90.04%, an increase of 4.33 percentage points from the previous week and a year-on-year increase of 3.46 percentage points," Sinosteel analysts said.
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