China's steel futures rise on production limits, iron ore extends losses

Credit: REUTERS/CHINA STRINGER NETWORK

China's steel futures picked up on Tuesday, rising as much as 2.5%, as some steel mills began to limit production on the back of recent price falls and an expected softening in demand.

Steel futures rises as much as 2.5%

Dalian iron ore moving within tight range

BEIJING, Aug 13 (Reuters) - China's steel futures picked up on Tuesday, rising as much as 2.5%, as some steel mills began to limit production on the back of recent price falls and an expected softening in demand.

The most-active construction steel rebar SRBcv1 on the Shanghai Futures Exchange, for October delivery, rose 1.7% to 3,662 yuan ($518.88) per tonne as of 0215 GMT. It closed down at 3,589 yuan a tonne on Monday.

"Some steel firms have reached the breakeven levels and have been actively limiting production," said Richard Lu, senior analyst at metals consultancy CRU Group's Beijing office.

"Demand for rebar is expected to soften in the second half of this year and would be in line with the real estate market," Lu said.

The most-traded iron ore contract DCIOcv1 on the Dalian Commodity Exchange, for January delivery, extended losses but held in a tight range. It was down 0.9% at 620.0 yuan a tonne as of 0215 GMT.

Port stocks of seaborne iron ore across China stood at 122.5 million tonnes as of August 11, after rising for almost a month, weekly data tracked by SteelHome consultancy showed. SH-TOT-IRONINV

FUNDAMENTALS

* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 was down 3.2% at $90.5 a tonne on Monday, the lowest level in over four months, SteelHome data showed.

* Hot-rolled steel SHHCcv1 used in cars and home appliances rose 1.4% to 3,677 yuan a tonne.

* Other steelmaking inputs also rose, with Dalian coking coal DJMcv1 edging up 0.18% at 1,416.5 yuan a tonne while coke DCJcv1 gained 1.3% to 1,996 yuan.

* Brazil's mining regulator on Monday pushed back deadlines by up to four years to close dangerous tailing dams.

* China's vehicle sales fell in July for a 13th consecutive month and new energy vehicle sales contracted for the first time in over two years.

* For the top stories metals and other news, click TOP/MTL or MET/L

($1 = 7.0575 Chinese yuan renminbi)

(Reporting by Min Zhang and Shivani Singh; editing by Richard Pullin)

((min.zhang@thomsonreuters.com; (8610) 5669-2105;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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