Tuesday , June 15 2021

Shanghai rebar climbs with hope for a bigger economic stimulus Agricultural products



* Steel production in China in October amounted to 82.55 million T – NBS

* Increase in investments in fixed assets by 5.7%. In January-October-NBS

* Inventory of steel to the lowest level since January – Mysteel

BEIJING, November 14 (Reuters) – Chinese steel rebar in China has regained its value for many months, despite the record high steel production in October, because investors expected further push from Beijing to stimulate the economy in the face of mixed economic data.

In October, the country produced a total of 82.55 million tons of crude steel, which is the highest level for at least eight years, according to the National Bureau of Statistics (NBS), suggesting that the mills maintain a high working load before the winter curbstones.

"Operations in steel mills are likely to be even more limited in the winter … When supply is not a serious problem, demand from downstream sectors will be a key element in the market," said Richard Lu, a CRU analyst in Beijing.

Investment growth in fixed assets accelerated to 5.7 percent in January-October, suggesting that Chinese policymakers are fast tracking infrastructure projects, according to NBS data.

However, the increase in real estate investment in October fell to the 10-month minimum, and home sales fell again, as developers have halted their expansion plans in the face of declining demand, according to NBS.

Meanwhile, credit growth in the world's second largest economy slowed sharply in October, and household loans fell to 563.6 billion yuan from 754.4 billion yuan in September, data from the central bank showed on Tuesday.

"(Data) suggests an increase in economic downward pressure in the future … We expect more policies to come down to reduce pressure," Huatai Futures analysts said in a note.

Steel inventories in Chinese steel mills decreased last week from November 9 to 8.91 million tonnes, the last observed in mid-January, according to data collected by Mysteel.

Benchmarking prices of reinforcing bars in construction increased by 1.5 percent, to the level of 3,926 yuan (USD 564.99) per ton, when the market closed for a lunch break at 3:30 GMT, also under the influence of temporary disruption of supplies after that as the Hebei province produced an orange smog alarm in the upper steelworks, demanding from the steel mills to halve operations from November 12 to November 15.

The most sold contracts for iron ores in January at the Dalian commodity exchange fell by 1 percent, to 510.5 yuan per ton.

Coking coal prices rose 1.2 percent to 1,364 yuan, while coking coal contracts grew 1.9 percent to 2351 yuan.

1 $ = 6.9488 Chinese yuan
Reporting by Muyu Xu and Dominique Patton; Editing by Rashmi
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