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Data shows rising steel output
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Coking coal and coke still trend downward
(Updates afternoon prices trends, adds bullet points)
BEIJING, March 9 (Reuters) - Dalian and Singapore iron
ore futures reversed course to trade higher on Thursday
afternoon, as data showing higher steel output lifted sentiment.
Prices had fallen in the morning due to caution around a
slowdown in China's consumer inflation in February, and a
contraction in transaction volumes of construction steel
products the previous day.
Output of five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil, and medium plate grew by 49,000 tonnes from the previous week, to around 9.52 million tonnes as of March 9, data from consultancy Mysteel showed. The most-traded May iron ore futures contract on China's Dalian Commodity Exchange ended daytime trading 0.6% higher at 916.5 yuan ($131.45)a tonne. On the Singapore Exchange, the benchmark April iron ore was at $126.95 a tonne as of 0752 GMT, up 0.09%. "The gains seen in the afternoon are mainly because sentiment improved on the better-than-expected increase in the apparent demand of rebar," said a Beijing-based analyst who is not authorised to speak to the media. Rebar on the Shanghai Futures Exchange climbed 1.46% to 4,313 yuan a tonne, hot-rolled coil grew 1.36%, wire rod rose 0.84%. The strength echoed with views from some analysts and traders who remained optimistic about the recovery in the downstream demand in the near term, even in the face of losses in the morning session. The downstream steel demand has been continuously recovering, lending persistent support to the ferrous market in the short run, said Yu Chen, a Shanghai-based senior iron ore analyst at Mysteel. "We believe fundamentals (of the ferrous market) will be stable or in line with expectations in the short term. And the hot metal output will gradually peak in March," said Yao Xinying, a Shanghai-based research director of the ferrous market at consultancy SMM. Other steelmaking ingredients, including coking coal and coke, also regained some lost ground by recording smaller losses compared to the morning trade. Coking coal edged down 0.63% and coke fell 0.6%. Stainless steel moved down 0.44%. ($1 = 6.9721 Chinese yuan) (Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Varun H K and Uttaresh Venkateshwaran)
