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Chinese steel futures rise on pollution control pledge, raw materials extend losses

BEIJING :China's steel rebar and hot-rolled coils futures rose on Friday as the environment ministry pledged to cut concentrations of hazardous, small airborne particles known as PM2.5 over the winter, while steelmaking ingredients fell more on coal drags.

The Ministry of Ecology and Environment said China aims to cut PM2.5 by an average of 4per cent on an annual basis in key pollution control cities during this autumn-winter season, and will arrange staggered production at steel mills.

Production of five main steel products - rebar, hot-rolled coils, wire rod, cold rolled coils and medium plates - at steelmakers tracked by Mysteel consultancy rose 4.9per cent this week to 9.2 million tonnes. However, it was well below the 10.7 million tonnes weekly output in the year-earlier period.

Construction-used rebar on the Shanghai Futures Exchange, for January delivery, ended up 0.8per cent at 4,646 yuan (US$727.14) per tonne.

Hot-rolled coils on the Shanghai bourse rose 0.9per cent to 5,003 yuan a tonne and stainless steel futures edged 0.6per cent higher to 19,080 yuan per tonne.

Prices of steelmaking raw materials, however, dropped further on weak sentiment amid Beijing's crackdown on coal prices.

The country's top economic planner said initial results after its recent investigation into coal producers showed there was still room for further adjustment of coal prices.

The most actively traded coking coal futures on the Dalian Commodity Exchange plunged 10.2per cent to 2,268 yuan a tonne, the lowest closing price since Aug. 23.

The contract dived 21.1per cent this week, marking its biggest weekly loss since the week ended Aug. 19, 2016.

Coke futures slumped 7.9per cent to 2,978 yuan per tonne. They fell 16.4per cent this week.

Benchmark iron ore futures faltered 5.6per cent to 638 yuan a tonne. Spot prices of iron ore with 62per cent iron content for delivery to China slipped US$6 to US$116.5 per tonne on Thursday, data from SteelHome consultancy showed.

(US$1 = 6.3894 Chinese yuan)

(Reporting by Min Zhang in Beijing and Tom Daly; Editing by Subhranshu Sahu)

Source: Reuters

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