Sunday, October 17

Shanghai stainless steel extends losses as power curbs hit demand

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BEIJING — Chinese stainless steel futures dropped more than 3% on Wednesday, declining for a fourth straight session, as demand for the metal was dampened by slowing manufacturing activities amid a power crunch in the country.

China is grappling with a power shortage recently, which has halted plants in major industrial hubs including Guangdong and Jiangsu due to energy consumption controls and shortage in coal supply.

“Downstream consumption for stainless steel has been constrained, especially in Guangdong province,” said Fu Zhiwen, analyst with Huatai Futures, adding that profits at fabricators are also down on high prices.

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The most-traded stainless steel on the Shanghai Futures Exchange, for November delivery, declined 1.4% to 19,735 yuan ($3,052.02) per tonne as of 0330 GMT. The contract plunged as much as 3.1% to 19,405 yuan a tonne earlier.

Other steel products on the Shanghai bourse inched higher.

Construction material steel rebar and hot rolled coils used in the manufacturing sector both edged up 0.3% to 5,616 yuan and 5,642 yuan per tonne, respectively.

Benchmark iron ore futures on the Dalian Commodity Exchange, for January delivery, jumped 2.7% to 698 yuan a tonne.

Spot prices of iron ore with 62% iron content for delivery to China gained $1 to $118.5 a tonne on Tuesday , according to SteelHome consultancy.

Coking coal futures leaped 2.2% to 2,995 yuan a tonne.

Coke futures increased 1.9% to 3,378 yuan per tonne.

($1 = 6.4662 Chinese yuan renminbi) (Reporting by Min Zhang and Shivani Singh; Editing by Rashmi Aich)

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