China's steel, iron ore rebound on restocking demand
China’s steel and iron ore prices rose on Tuesday, supported by expectations that many halted construction activities in the country will resume and new ones will kick off soon, boosting restocking demand for the commodities.
The most-active construction steel rebar contract on the Shanghai Futures Exchange climbed as much as 2.5 percent to hit 3,820 yuan ($568.88) a tonne, before ending the session at 3,815 yuan to post its biggest daily gain in four weeks.
Hot rolled coil ended 2.4 percent higher at 3,776 yuan a tonne.
“Steel prices should rise after we saw less output last week, and with demand expected to improve, especially in the construction sites, because the weather is getting better,” said analyst Richard Lu of CRU in Beijing.
“Demand for steel flat products has been particularly robust now maybe because of some restocking, as inventories have fallen,” he said.
The benchmark rebar contract dropped 10 percent since hitting a five-month closing peak of 3,856 yuan on Feb. 11, with China’s slowing economic growth amid a trade war with the United States clouding the outlook for its steel demand.
The most-traded iron ore contract on the Dalian Commodity Exchange jumped 1.9 percent to 612.5 yuan a tonne.
Iron ore prices in Dalian have been volatile since hitting a record intraday high of 657.5 yuan a tonne on Feb. 12, lifted by concerns about supply disruptions in the wake of top miner Vale SA’s tailings dam disaster in January.
