China stainless steel futures extend gains on tight supply

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BEIJING, Dec 23 (Reuters) – Chinese stainless steel futures extended gains for a third straight session on Thursday, rising as much as 3% on expectations of a drop in production, even as demand was hampered by a drop in seasonal consumption.

Steelmakers are expected to step up maintenance amid a weak demand outlook and metal output will remain at relatively low levels until the Chinese New Year holiday, Jinrui Futures wrote in a note, adding that steel prices stainless steel will be supported by raw material costs.

The most actively traded stainless steel contract on the Shanghai Futures Exchange for February delivery gained as much as 3% to 16,635 yuan ($2,611.26) a ton. They rose 2.9% to 16,625 yuan per ton at the close.

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Steel rebar futures on the Shanghai Stock Exchange for May delivery rose 0.6% to 4,479 yuan a ton.

Hot-rolled coils, used in cars and household appliances, rose 0.04 percent to 4,584 yuan per ton.

Prices for steel ingredients on the Dalian Commodity Exchange were mixed.

Benchmark iron ore futures fell 0.7% to 693 yuan a tonne, tracking the spot market as 62% iron ore prices for delivery in China fell 1.5%. $ to $127.5 a ton on Wednesday, according to consultancy SteelHome.

Dalian coking coal prices ended up 1.2 percent at 2,250 yuan per ton and coke futures rose 0.6 percent at 3,088 yuan per ton.

($1 = 6.3705 Chinese yuan renminbi)

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Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Vinay Dwivedi

Our standards: The Thomson Reuters Trust Principles.

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