Steel factories in Tangshan, China reopened after the 100th anniversary of the founding of the Communist Party of China.
Iron ore futures on the Dalian Stock Exchange, for September delivery, rose 5.6% to 1,226 yuan per tonne (equivalent to 189.8 USD per ton), the highest level since June 11.
Iron ore prices in China last session (July 5) increased more than 5% due to increased demand after steel mills in Tangshan – the country’s steel production center – resumed production after a while. pause to celebrate the 100th anniversary of the founding of the Communist Party of China.
Steel output at some manufacturers is limited due to the 100th anniversary of the founding of the Communist Party of China and the government’s environmental policies.
These activities caused blast furnace utilization rates at 247 factories across China to drop to 81.01% as of July 2 from a week earlier, according to information from consulting firm Mysteel.
“As Tangshan resumes production, short-term demand will return,” said analysts at SinoSteel Futures. However, analysts also note that overall demand is still weakened by China’s policy to cut steel production.
Iron ore futures on the Dalian Exchange, for September delivery, rose 5.6 percent to 1,226 yuan per tonne (equivalent to $189.8 per ton), the highest level since June 11.
Spot price of 62% Fe ore in China was $0.50/ton to $217.5/ton on July 2, according to consulting firm Steel Home.
Other steelmaking materials also increased. Coke futures on the Dalian bourse rose 3.1% to CNY 1,971 a tonne ($310 a tonne) and coke futures rose 3.5% to CNY 2,682 a tonne ($420 a tonne). .
Steel prices on the Shanghai floor also went up. Specifically, construction rebar for October delivery increased 2.1% to 5,222 CNY/ton (equivalent to 810 USD/ton). Hot rolled coil increased 1.6% to 5,494 CNY/ton (equivalent to 850 USD/ton).
Analysts at Haitong Futures said that steel supply is facing increasing pressure recently. The reason is that some regions push ahead with plans to cut output while some factories are facing losses.
“However, demand is currently at a low point. Steel prices will remain volatile,” the analysts said.
Stainless steel futures in Shanghai for August delivery rose 1.3% to 16,665 CNY/ton (equivalent to $2,580/ton).
China is the world’s largest steel producer. In 2019, the country produced 1.001 billion tons of steel, accounting for 53.5% of global production. In 2020, steel production in the world’s most populous country is 1.054 billion tons, accounting for 56.5% of global production.
Source: VITIC/Reuters
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