I really hope that the Nashwauk event gets resolved in CLF's favour. Couple that with HRS pricing, SBIO pricing and increased volumes and we should have the makings of a very solid turn-around and persistently elevated share price. I hope so since I own 19,000 shares.
Shanghai steel hits multi-week highs on restocking demand, lifts iron ore
Chinese steel futures rose to multi-week highs on Wednesday, supported by expectations that traders would replenish stockpiles after a week-long holiday amid brisk sales of cars and appliances. Prices of flat steel products, used in transport and appliances, have outpaced gains in long products, used in construction.
“We are seeing better performance in the automotive and home appliance sectors than construction and this is evidenced by higher flat product prices,” said Richard Lu, analyst at CRU consultancy in Beijing. China’s auto market, the world’s largest, has rebounded strongly since October last year, when the central government cut sales tax on vehicles with engines of 1.6 litres or smaller to speed up slowing sales in a weakening economy.
The most-traded hot-rolled coil (HRC) contract on the Shanghai Futures Exchange was up 3 percent at 2,709 yuan ($406) a tonne by 0317 GMT, after rising as far as 2,712 yuan, its loftiest since Sept. 2. HRC is used to make cold-rolled coil steel that goes into making car components and electrical products.
Rebar, used in construction, was up 1.3 percent at 2,338 yuan, after hitting 2,348 yuan earlier, its strongest since Sept. 26. A drag on construction demand for steel is China’s renewed efforts to restrict home purchases to rein in rising prices, particularly in big cities.
A wave of restrictions imposed on housing markets in major Chinese cities last week have unnerved some buyers and developers, cutting the area of new homes sold in places such as Beijing and Shenzhen by more than half during the week-long National Day holiday. Overall, steel inventory among Chinese traders was down 2.9 percent on Sept. 30 compared to the previous week, according to Morgan Stanley. There wasn’t a lot of steel restocking that happened before China’s National Day break and it could happen now, with the holiday over and inventories low, said CRU’s Lu.
Gains in steel prices helped lift raw material iron ore on the Dalian Commodity Exchange by 2.4 percent to 426.50 yuan per tonne. Rising futures has increased activity in the physical market this week, raising spot iron ore prices to a two-week peak. Iron ore for delivery to China’s Tianjin port climbed 1.3 percent to $56.50 a tonne on Tuesday, a level last seen on Sept. 23, according to The Steel Index. Source: Reuters (Reporting by Manolo Serapio Jr.; Editing by Tom Hogue)
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