China’s stainless steel futures rose more than 5% on Tuesday on concerns about tight supply as manufacturers cut output, while raw material prices were also supported.
” Domestic stainless steel companies are stepping up maintenance in the first quarter, while being affected by the Spring Festival holiday and Beijing Winter Olympics; overall output is expected to be depressed limited ,” said analysts at Jinrui Futures.
According to an announcement by Huatai Futures, stainless steel is also greatly affected by the price of nickel due to the scarcity of spot goods.
Stainless steel contract on the Shanghai Futures Exchange, for delivery in February, rose 5.3% to 17,920 RMB ($2,812.39)/ton. Closing price increased 4.4% to 17,760 RMB/ton.
Other steel prices on the Shanghai floor also increased. Construction rebar for May delivery increased 2% to 4,589 RMB/ton.
Hot rolled coil futures, used for cars and home appliances, rose 1.6 percent to 4,719 yuan a tonne at the close.
China Iron and Steel Association on Monday said China’s 2022 crude steel output is expected to fall to 1.03 billion tonnes from a record 1.065 billion tons, reaching a “balance of supply and demand”.
Iron ore futures on the Dalian Commodity Exchange ended up 2.8 % to RMB 724/ton. However, 62% iron ore spot for China fell $1 to $127.5/ton on Monday, according to consulting firm SteelHome.
According to Huatai Futures, “Processed steel producers are still likely to be profitable in the long-term based on expectations of the resumption of steel production and strong demand supply ahead of the holiday season that could drive up prices.” iron ore” , according to Huatai Futures.
Coke futures in Dalian added 0.4 % to RMB 2,295/ ton while coking coal fell 0.2% to RMB 3,171/ ton.
(1 USD = 6.3718 RMB)