Chinese steel futures advanced on Monday, with rebar and hot-rolled coil gaining more than 3%, lifted by attractive industrial profit margins and rising demand amid strong construction and manufacturing activity.
China's industrial profit surged 179% in the first two months from the year-ago period, data from the National Bureau of Statistics showed on Saturday.
Margins in the manufacturing sector jumped 219.5% on an annual basis while profit earned by ferrous smelting and processing companies soared 271% during the January-February period, according to the statistics bureau.
Apparent demand for five main steel products, including steel rebar and hot-rolled coil, rose 5.6% week-on-week, data from Mysteel consultancy showed.
"According to the usual practice, if daily turnover for construction materials stays above 200,000 tonnes for a week, it can be proved that peak demand season has come," Tang Chuanlin, analyst with CITIC Securities said in a note.
Construction rebar on the Shanghai Futures Exchange , for May delivery, gained as much as 3.3% to 5,005 yuan ($764.97) a tonne. It was up 2.29%, as of 0302 GMT.
Hot-rolled coil futures, used in the manufacturing sector, jumped 3.5% to 5,318 yuan per tonne.
Shanghai stainless steel inched up 0.7% to 14,430 yuan a tonne. Prices for steelmaking raw materials on the Dalian Commodity Exchange also gained.
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