China's construction steel rebar prices recovered from a two-day slide on June 12, lifted by a price hike at big steel firms and on easing concerns over excess supplies in the market amid a declining utilisation rate at mills.
Shanghai benchmark rebar prices rose 1.9%t to 3,856 yuan/t ($602.42/t), its highest close since early December last year.
China's top steelmaking companies, Baoshan Iron & Steel and Wuhan Iron and Steel Co, said on June 12 that they will raise prices of some hot-rolled coil, beam and steel wire products for July delivery.
On June 11, Jiangsu Shagang Group, the country's biggest private-owned steel mill by production capacity, said it will hike spot rebar and some wire products prices for June 11-20 delivery.
"As the low season for steel demand is approaching, price hikes at mainstream steel firms helped to stabilise market sentiment," said analysts at Orient Futures in a note.
Summer is typically an off-peak season for the steel sector in China as high temperatures and heavy rain across the country curb construction activity.
De-stocking process for steel products at Chinese traders is slowing down. The inventory only fell by 390,000 tonnes last week as of June 8, the smallest weekly reduction since mid-March, and stood at 10.36 million tonnes, data showed.
Recent environmental inspections also helped support steel prices stay at a high level, with utilisation rates at steel blast furnaces across China falling for a third consecutive week last week to 71.41%, easing the pressure of oversupply in the market.
The most actively traded iron ore futures on the Dalian Commodity Exchange recouped from losses in early trade and closed 1% higher at 473.5 yuan/t despite mounting inventories at ports.
Stockpiles of iron ore at major Chinese ports fell marginally to 161.03 million tonnes - most of it Australian ore - last week from a record 161.98 million tonnes the previous week, data showed.
Spot iron ore for delivery to China's Qingdao port .IO62-CNO=MB fell 0.7% to $66.75/t on June 11, according to Metal Bulletin.
Dalian coke prices rose 4% to 2,141.5 yuan/t, while coking coal futures jumped 3% to 1,277.5 yuan/t, spurred by worries of tight supplies amid Beijing-led environmental checks.
(Writing by Tammy Yang Editing by Harry Huo)
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