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Dalian ferrous materials fall on lean demand, coal price controls

Dalian ferrous materials fall on lean demand, coal price controls

FILE PHOTO: Steel pipes are seen stacked at an industrial park in Shenyang, Liaoning province, China September 30, 2021. REUTERS/Tingshu Wang

BEIJING/MANILA :Prices of steelmaking ingredients on the Dalian Commodity Exchange slipped on Monday due to sluggish demand at mills stemming from locally mandated output cuts, while Beijing's coal price controls also weighed on sentiment.

Steel, cement and coking plants in the steel hub of Tangshan city were recently ordered to cut production following a heavy-pollution alert, according https://mp.weixin.qq.com/s/dKRUky82IArEP8lZzKm6UA to the local government.

Stocks of imported iron ore at China's ports gained by 2.1 million tonnes to 142.3 million tonnes last week on weakening demand, data from SteelHome consultancy showed.

Benchmark iron ore futures on the Dalian bourse, for January delivery, ended down 5.7per cent to 619 yuan (US$96.68) per tonne.

Other steelmaking raw materials also declined after the state planner said the coal supply situation had improved significantly, and it would launch an online platform in early November to monitor the implementation of long-term coal contracts.

Dalian coking coal futures plunged to their daily trading limit in afternoon session, down 9per cent to 2,165 yuan a tonne.

Coke prices slumped 6.8per cent to 2,898 yuan per tonne at close. They fell as much as 8.6per cent earlier during the session.

"Recently, affected by the government's stringent control of coal prices, costs plunged and sent down steel prices," analysts with Haitong Futures wrote in a note.

"In the short term, the impact from raw materials could be stronger than fundamentals."

Construction-use steel rebar on the Shanghai Futures Exchange fell 3.9per cent to 4,509 yuan a tonne.

Hot rolled coils futures, used in the manufacturing sector, slipped 4.2per cent to 4,826 yuan per tonne.

Stainless steel futures on the Shanghai exchange, for December delivery, fell 2.0per cent to 18,860 yuan a tonne.

(US$1 = 6.4024 Chinese yuan renminbi)

(Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Ramakrishnan M.)

Source: Reuters

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