Shanghai rebar prices fell as much as 1 percent on Wednesday as mills in Tangshan continued to ramp up output in the absence of fresh environmental curbs in China’s top steelmaking city.
The most active construction steel rebar futures contract on the Shanghai Futures Exchange, for January, fell as much as 1 percent to 4,066 yuan ($595.26) a tonne. They were down 0.4 percent at 4,090 yuan a tonne at 0217 GMT.
Steel mills in Tangshan, in Hebei province which surrounds Beijing, were ordered to shut some production capacity over six weeks from mid-July until the end of August to lower their emissions of small breathable particles known as PM2.5.
Shanghai rebar had closed up 0.7 percent on Tuesday on expectations Tangshan could introduce new curbs this month on environmental grounds, but there has so far been no official notice of such a plan.
“Recently, the intensity of the … production restrictions on steel mills has weakened,” said Zhao Xiaobo, an analyst at Sinosteel Futures in Beijing.
“The steel mills that limited their production previously, such as in the Tangshan area, have restored the production and steel output will rise in the short-term,” he added.
The higher production rates at mills boosted steelmaking raw materials, with Dalian iron ore rising as much as 1 percent to 490 yuan a tonne. Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB climbed by 0.9 percent on Tuesday to $66.62 a tonne, according to Metal Bulletin.
Dalian coke futures jumped as much as 3 percent in early trade, snapping a four-day losing streak, before paring gains to 2.2 percent, while coking coal rose 1.3 percent.
Source: Reuters / Hellenic shipping News