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China iron ore, steel futures rise on lenient output curbs

Reuters

Kitco News

BEIJING, Sept 4 (Reuters) - Iron ore futures in China rose to a 3-1/2-week high on Wednesday, fuelled by hopes of stable demand as anti-pollution curbs in top steelmaking cities ahead of the National Day holiday were more lenient than expected.


The most-traded iron ore futures contract on the Dalian Commodity Exchange for January 2020 delivery rose as much as 2.1% to 649 yuan ($91.50) a tonne on Wednesday and closed at 644.5 yuan.


"Overall production curbs in Tangshan in September are on par with August, which are loose," Huatai Futures said in a note, adding that output restrictions in Wuan, county-level city of the second-biggest steelmaking city of Handan, tightened slightly this month compared with August.


The most-active construction steel rebar on the Shanghai Futures Exchange was closed up 0.7% at 3,423 yuan a tonne.


"We believe that Chinese demand has further room to grow and outpace production in Q419 and 2020 as the government is now more likely to step up targeted stimulus for the infrastructure sector on the back of a more protracted trade dispute with the U.S.," according to Fitch Solutions Macro Research.


FUNDAMENTALS


* Benchmark 62% iron ore for delivery to China , as assessed by SteelHome consultancy, settled at $91 a tonne on Tuesday.


* Hot-rolled coil , used in cars and home appliances, on the Shanghai Futures Exchange rose 0.5% to 3,465 yuan per tonne.


* Other steelmaking ingredients were also up, with Dalian coking coal adding 0.7% to 1,319 yuan a tonne, while coke gained 1.2% to 1,916 yuan.


* Activity in China's services sector expanded at the fastest pace in three months in August as new orders rose, prompting the biggest increase in hiring in over a year, a private survey showed on Wednesday.
* China hoped that the two sides would seek common ground while setting aside differences, Vice-Premier Liu He, China's top trade negotiator, said on Tuesday.
* China's environment regulator has asked people to call out local officials carrying out blanket curbs in a "one-size fits all" way to support the nation's fight against pollution, as these have led to hindering large parts of the industrial economy.
* For the top stories metals and other news, click TOP/MTL or MET/L

($1 = 7.0928 Chinese yuan renminbi)

(Reporting by Min Zhang and Tom Daly, Editing by Sherry Jacob-Phillips)

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