China steel heads for second weekly fall amid ample supply
MANILA, Nov 9 (Reuters) - China’s steel futures edged higher on Friday, but were on course for their second weekly drop amid signs that steel output in the world’s top producer will remain high.
Prices of steelmaking raw materials rose, with iron ore hitting a one-week peak and coking coal and coke also gaining.
The most actively traded rebar on the Shanghai Futures Exchange was up 0.9 percent at 3,975 yuan ($572) a tonne, as of 0239 GMT, having touched a 3-1/2-month low of 3,878 yuan on Thursday.
However, the construction steel product has fallen nearly 2 percent for the week so far.
“China’s steel production may not show any signs of weakening when the winter season starts from mid-November as China’s government will exercise flexibility in reining in production ... as the pollution control (efforts have) made some progress,” Argonaut Securities analyst Helen Lau said in a note.
Ditching blanket production curbs imposed last winter, China has given cities and provinces the flexibility to set their own restrictions based on their emission levels.
Data from the China Iron and Steel Association showed that average daily crude steel production at its member mills stood at 1.97 million tonnes over Oct. 1-20, nearly matching September’s 1.98 million tonnes.
