Chinese steel prices hit five-week-high amid demand hopes, supply worries

China’s steel prices hit a five-week-peak on Thursday amid expectations of firmer demand as the government takes steps to support the economy and on concerns that supply could tighten as winter production curbs bite.

At least three cities in Hebei, including provincial capital Shijiazhuang, have ordered industrial plants and miners to limit operations to lower toxic emissions, state-backed national radio reported.

Cities in northern China have recently ordered steel mills to curtail additional output towards year-end as local authorities scramble to meet annual air quality targets.

“Utilization rates at Chinese steel mills are expected to maintain their downward trend in the coming month ... However, steel mills will still have restocking demand as their inventory of raw materials remains at low levels,” analysts from CITIC Futures said in a note in Mandarin.
The most-active iron ore contract on the Dalian Commodity Exchange climbed 1.9 percent to 496.5 yuan a tonne when the market closed at 0700 GMT, just shy of the day’s peak of 497 yuan, its strongest in four weeks.

Reporting by Muyu Xu and Tom Daly; Editing by Joseph Radford and Sunil Nair
Source: www.teuters.com

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