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China's steel futures rises on declining inventories, spot prices hikes

Rebar stockpiles fell for 6 weeks - Mysteel

* Mills hiked physical steel prices

* Market enthused by robust demand - analyst

BEIJING, April 24 (Reuters) - China’s steel rebar futures rose on Tuesday, almost matching a five-week high hit during previous session, as concerns over weak demand subsided amid declining inventories.

Construction steel rebar contracts for October delivery on the Shanghai Futures Exchange rose 1.9 percent from the previous session’s close to 3,576 yuan ($566.34) a tonne as of GMT 0225. They peaked at 3,589 yuan a tonne, the highest since March 9, in early trade.

Over the weekend, China’s biggest privately owned steel company Jiangsu Shagang Group hiked rebar prices by 120 yuan to 3,940 yuan for late April delivery, prompting more mills to raise prices on Monday.

Spot steel prices climbed to their the strongest level in one month, up 0.6 percent to 4,193.97 yuan a tonne, according to data from Mysteel consultancy.

“The market mood is temporarily enthusiastic amid continuous release of (pent-up) demand and positive economic policies,” analysts from Orient Futures wrote in a note.

Meanwhile, rebar inventories continued to decline for the sixth straight week through April 20. Mysteel data showed inventories dropped 5.9 percent to 15.02 million tonnes, the lowest level since early February.

Prices of raw materials for steelmaking also rallied.

The most-traded iron ore futures on the Dalian Commodity Exchange rose 1.2 percent to 477 yuan a tonne during early trade on Tuesday.

Coking coal prices advanced 2.7 percent to 1,185 yuan a tonne, while coke contracts went up 2.3 percent to 1,935 yuan a tonne, also buoyed by the news that industrial associations are considering reducing output by at least 15 percent.

According to Mysteel data, the capacity utilisation rate at steel mill blast furnaces across China continued to climb. It increased by 0.28 percentage points to 62.27 percent last week compared with a week earlier, the highest level since early November.

Sources : Reuters

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