Economic indicators suggest that government stimulus is boosting the ailing construction industry, which should flow through to stronger consumption for the steel-making material. Set against that, a snap lockdown in the steel hub of Tangshan is a reminder that China’s Covid Zero policies could suppress output and sap demand.
Iron ore in Singapore fell 0.7 per cent to $US96.40 a tonne as of 3:52 p.m, having climbed as much as 2.1 per cent earlier. Futures in Dalian closed 1.4 per cent lower, while steel rebar and hot-rolled coil contracts retreated in Shanghai.
Higher steel output and falling rebar inventories are signaling that Beijing’s bid to stimulate construction after an almost yearlong property rout are having a positive impact. Daily steel output edged up 3.3 per cent in the first 10 days of September compared with the end of August, while new investments are fueling building activity.
