Shanghai steel futures track spot market higher as demand improves

BEIJING, Nov 22 (Reuters) – Steel futures prices in China jumped on Monday, with hot-rolled coils and construction rebar climbing more than 3% at market open to narrow the gap with spot prices, as traders cheered a marginally improved consumption of industrial metals.

Apparent demand of five main steel products in China, including rebar, wire rod, hot-rolled coils and others, gained for two consecutive weeks and was up 4.2% last week from early-November, data from Mysteel consultancy showed.

“In the short term, property-related policy is expected to see improvement, which could probably lift market sentiment,” Galaxy Futures wrote in a note, warning that spot market still faces risk of lower costs and consumption.

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Spot prices of rebar and hot-rolled coils are about 400 yuan and 200 yuan higher, respectively, than the currently most-traded January futures contracts.

Analysts with GF Futures noted that possible marginal easing of real estate financing situation is not likely to reverse steel demand of January deliveries.

The most-active construction rebar on the Shanghai Futures Exchange was up 2.5% at 4,307 yuan ($674.62) per tonne, as of 0323 GMT.

Hot-rolled coils , used in cars and home appliances, increased 1.1% to 4,414 yuan a tonne.

Stainless steel futures on the Shanghai bourse inched 0.7% higher to 17,245 yuan per tonne.

Prices for steelmaking ingredients on the Dalian Commodity Exchange were mixed.

Benchmark iron ore futures , for January delivery, surged 4% to 547 yuan a tonne. Spot prices of iron ore with 62% iron content for delivery to China were up $1.5 to $91.5 a tonne on Friday, according to SteelHome consultancy.

Dalian coke futures jumped 3.5% to 2,858 yuan a tonne.

Coking coal prices , however, edged down 0.8% to 1,847 yuan per tonne after the state planner said coal output continued to increase. read more

($1 = 6.3843 Chinese yuan)

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Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Sherry Jacob-Phillips

Our Standards: The Thomson Reuters Trust Principles.