Friday, October 7

Shanghai stainless steel rebounds as nickel prices surge

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BEIJING — Chinese stainless steel futures snapped a three-session losing streak on Thursday to rise more than 5%, buoyed by a surge in steelmaking ingredient nickel prices, although analysts warn that downstream consumption of the metal remains sluggish.

Nickel prices on the Shanghai Futures Exchange jumped as much as 8% to a record 161,600 yuan ($25,283.58) per tonne.

China’s imports of nickel ore and nickel pig iron fell 1.6% and 12.3%, respectively, on a monthly basis in September, data released by the customs office on Wednesday showed.

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Stainless steel futures on the Shanghai bourse, for November delivery, gained 4.1% to 21,085 yuan per tonne by 0215 GMT. Earlier in the session, they had risen 5.1% to 21,280 yuan.

However, analysts say stainless steel consumption is still slow in the short term as recent power rationing has hurt manufacturing activities in the world’s second-largest economy.

“Costs at downstream fabricators are rising, (companies) are unwilling to stock up goods, stainless steel transaction is relatively sluggish,” analysts with GF Futures wrote in a note.

Other steel prices on the Shanghai exchange were lower. Construction rebar, for January delivery, fell 1.6% to 5,325 yuan a tonne and hot rolled coils dipped 0.5% to 5,587 yuan per tonne.

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Coking coal and coke futures on the Dalian Commodity Exchange extended losses fueled by China’s signal it might intervene to cool prices.

Meanwhile, the securities regulator said late on Wednesday that it would ask futures exchanges to take multiple measures, including raising fees and restricting trading limits, in response to high coal prices.

Dalian coking coal plunged 5.7% to 3,333 yuan a tonne and coke futures fell 2.2% to 4,073 yuan per tonne.

Benchmark iron ore futures inched up 0.7% to 718 yuan a tonne.

($1 = 6.3915 Chinese yuan) (Reporting by Min Zhang and Shivani Singh; Editing by Subhranshu Sahu)