Shanghai steel futures continued their upward trend on Tuesday, driven by ongoing production restrictions in Tangshan, China’s leading steelmaking city.
Tangshan has instructed steel mills to limit their steel and sintering operations by 30-50pct throughout July, as reported by market sources.
While the steel output curbs provided support for steel futures, the overall upside remained limited due to weak demand resulting from extreme weather conditions. Heavy rainfall and heatwaves have adversely affected construction activity in the country.
In the Shanghai Futures Exchange, rebar futures increased by 0.78pct to 3,768 yuan (USD 520) per ton, HRC futures rose by 0.89pct to 3,866 yuan (USD 533) per ton, and wire rod futures grew by 0.45pct to 4,262 yuan (USD 588) per ton. Stainless steel futures remained relatively stable at 14,700 yuan (USD 2,028.5) per ton.
Iron ore futures remained flat as the steel output restrictions dampened the demand outlook. However, the rise in steel output in late June and declining inventory levels at Chinese ports provided some support for iron ore futures. The September contract for iron ore on the Dalian Commodity Exchange showed minimal movement at 821 yuan (USD 113) per ton.
Dalian coke and coking coal futures experienced declines, with coke prices dropping by 1.63pct and coking coal prices declining by 2.73pct. Coke futures reached 2,078 yuan (USD 287) per ton, while coking coal futures stood at 1,316 yuan (USD 182) per ton.
1 USD / 7.24 yuan
