BEIJING/MANILA, March 3 (Reuters) - Chinese steel rebar futures surged more than 5% on Wednesday to their highest level in about a decade, as the country’s plan to take more environmental-protection measures stoked worries about a cut in production.
Besides the industry ministry’s pledge to cut crude steel output this year, heavy pollution alerts issued in Hebei province and the upcoming annual parliament meeting will also affect steel products’ output in the short term, SinoSteel Futures said in a note.
Seven blast furnaces in the top steel-making city of Tangshan were required to be shut down by March 10, which might likely lower pig iron output by 5,000 tonnes a day, according to GF Futures.
The most-actively traded rebar contract on the Shanghai Futures Exchange, for May delivery, closed up 3.9% to 4,842 yuan ($749.11) per tonne. It surged as much as 5.6% to the highest level since August 2011 earlier in the session.
China’s trading volume for steel products used in construction stood at 196,800 tonnes on Tuesday, the highest daily transactions since Jan.4, according to Mysteel consultancy.
Hot-rolled coil futures, used in cars and home appliances, jumped 3.5% at close to hit a record high of 5,026 yuan per tonne.
Prices of steelmaking raw materials also gained.
Benchmark iron ore futures on the Dalian Commodity Exchange rose 1.8% to 1,154 yuan a tonne.
Dalian coking coal surged 6.2% to 1,525 yuan per tonne and coke increased 0.8% to 2,520 yuan per tonne.
Stainless steel futures on the Shanghai exchange fell 2.1% to 14,685 yuan a tonne.
FUNDAMENTALS
* China’s yuan inched up against a weaker dollar on Wednesday, with market sentiment recovering from comments made by a top banking regulator a day earlier about managing capital inflows.
* China’s top steelmaker Baowu Steel Group and regional producer Fujian Sangang Group have signed agreements to invest 20 billion yuan in two separate steel projects in the southeastern Fujian province, local media reported on Tuesday.