Shanghai rebar rises for 3rd day on new steel capacity ban

reuters.com Price,  futures 2018-06-14 15:19:00

Chinese rebar futures extended gains into a third session on June 14 after the country said it would ban new capacity for steel, coke and primary aluminium production in some key areas.


As part of a new three-year anti-pollution plan, the state council pledged a clampdown on any new capacity for steel, coke and electrolytic aluminium in regions such as Beijing-Tianjin-Hebei and Yangtze River Delta to curb industrial emissions, which are believed to be a main source of smog.


The announcement came a few days after the environment ministry said it will carry out a new round of inspections in 28 northern cities and some other smog-prone regions from June to April next year.


"The environmental policies are having bigger impacts on the market than expected, putting supply and demand at a relatively balanced situation," said Richard Lu, an analyst at CRU in Beijing.


The most-active rebar contract on the Shanghai Futures Exchange was up 0.6% at 3,887 yuan/t ($607.97/t).


Spot steel prices gained 0.4% to 4,379.5 yuan/t on June 13, data showed.


Prices for steelmaking raw materials were slightly changed on June 14.


The mostly traded iron ore futures on the Dalian Commodity Exchange had gained by 0.5% to 472 yuan/t as of 0142 GMT.


"Iron ore trading remains active with support of firm steel prices," CITIC Futures analysts said in a note in Mandarin, but warned of oversupply pressure from increasing shipment from Australia.


Iron ore shipments to China from Australia's Port Hedland terminal, a major shipping junction used by the countries top iron ore miners BHP Billiton and Fortescue Metals Group , rose 2.4% to 37 million tonnes in May compared with a month earlier.


As of June 8, stockpiles of imported iron ore reached 161.03 million tonnes, just below the record level of 161.98 million tonnes in the previous week, data showed.


Spot iron ore for delivery to China's Qingdao port .IO62-CNO=MB fell 0.3% to $67.02/t on June 13, according to Metal Bulletin.


(Writing by Tammy Yang  Editing by Jessie Jia)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

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