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Shanghai steel rallies 7 pct as China beats capacity cut target-The 18th China(Guangzhou)Int’l Metal &Metallur
gy Exhibition
11/29/2016 steel expo-metal &metallurgy expo |
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Reuters reported that Shanghai rebar steel futures rallied 7% on Friday to end near a 30-month high after China said it has cut 88 million tonnes of steel capacity this year, nearly double its target.
Chinese Vice Premier Liu Yandong said that large-size Chinese steelmakers had phased out 40.75 million tonnes of production capacity up to September and reductions by smaller companies brought the total to 88 million tonnes.
Analysts said that was well above China''s pledge to cut 45 million tonnes in steel production capacity this year and puts it well ahead of its plan to reduce its steel capacity by 100-150 million tonnes over the next three to five years.
Helen Lau, analyst at Argonaut Securities in Hong Kong said that "China may be able to achieve its target by next year. Capacity is being controlled and the steel market may be rebalanced quickly."
Rebar, a construction steel product, on the Shanghai Futures Exchange surged by its 7% trade limit to close at CNY 3,154 (USD 456) a tonne. That was near its November 14 peak of CNY 3,220, the highest since May 2014.
Gains in steel pulled up raw material iron ore. The most-traded iron ore on the Dalian Commodity Exchange closed up 4.6% at CNY 653.50 a tonne. Earlier, it hit CNY 656.50, near Thursday''s 33-month high of CNY 658.50.
Stronger futures should also push up spot iron ore prices which have rebounded almost 6 percent this week after dropping 8.8 percent last week.
-The
18th China(Guangzhou)Int’l Metal &Metallurgy Exhibition
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