Shanghai Stainless Steel Futures Drop Amid Higher Production Outlook

Steel pipes are stacked in an industrial park in Shenyang, Liaoning province, China on September 30, 2021. REUTERS / Tingshu Wang

BEIJING / MANILA, Nov 4 (Reuters) – Chinese stainless steel futures fell more than 2% on Thursday as traders anticipated higher production this month after some key producing regions eased power restrictions.

Stainless steel production expected in November is expected to increase 14.39% from the previous month, analysts at GF Futures wrote in a note, citing data from consulting firm Mysteel.

“The provinces of Jiangsu and Fujian have relaxed controls on energy consumption, the capacity of steel plants is gradually being restored,” according to GF Futures.

The most actively traded stainless steel contract on the Shanghai Futures Exchange, for delivery in December, fell 2.6% to 18,070 yuan per tonne. The contract ended down 2.3% at 18,130 yuan per tonne.

Other steel prices on the Shanghai Stock Exchange also fell as demand in downstream sectors remained sluggish.

Construction rebar, for delivery in January, fell 2.4% to 4,226 yuan per ton. Hot-rolled coils, used in manufacturing, fell 2.1% to 4,614 yuan per ton.

The prices of steel raw materials on the Dalian Commodity Exchange were mixed at the close.

Benchmark iron ore futures edged up 0.3% to 583 yuan per tonne. Coking coal futures jumped 1.5% to 2,405 yuan per tonne.

Coke prices, however, fell 4.3% earlier in the session and ended down 2.6% to 3,035 yuan per tonne.

($ 1 = 6.3921 Chinese yuan)

Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Sherry Jacob-Phillips and Shounak Dasgupta

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