Shanghai steel cuts losses, stays near 6-year high amid curbs
Shanghai rebar futures pared losses on Thursday to close near a six-year peak reached in the prior session on expectations further output curbs in China could keep supply tight in the world’s top producer.
On top of ongoing restrictions at industrial plants in many Chinese cities, Beijing is planning to impose production curbs for a second winter in a row to tackle pollution.
The most active rebar on the Shanghai Futures Exchange closed down 0.3 percent at 4,227 yuan ($619) a tonne, but well off the day’s trough of 4,179 yuan. The construction steel product touched 4,278 yuan on Wednesday, its loftiest since April 2012.
Hot rolled coil, used in manufacturing, slipped 0.3 percent to 4,220 yuan per tonne. It peaked at 4,287 yuan on Aug. 7, a record high.
“Looking ahead, we expect both steel and iron ore prices to stay strong and we expect to see more shortage in steel ahead, especially in winter times as China’s steel production cuts may spread to more cities in 2018 than 2017,” Argonaut Securities analyst Helen Lau said in a note.
