Steel, iron ore prices bullish amid rising demand

Chinese steel and iron ore futures soared against a backdrop of strong demand at mills as well as supply tightness to close the week on a positive platform.

Construction steel rebar on the Shanghai Futures Exchange , for October delivery, rose 1.8 per cent to 5,066 yuan per tonne, benchmark iron ore futures increased 1.2% to 1,185 yuan per tonne, August contract for Shanghai stainless steel futures rose 1.8 per cent to 16,750 yuan per tonne, while hot rolled coils , used in the manufacturing sector, increased 1.8 per cent to 5,288 yuan a tonne.

Fitch Solutions market analysts explained that iron ore and steel prices are once again rising higher due to rising demand from the Chinese steel industry and supply issues from the largest global producers.

They further stressed that an improvement in supply and weaker consumption by downstream players at current high prices are expected to cap gains in the coming months.

China Baowu Group, the world’s top steelmaker, said it would join forces with Vale and Shandong Xinhai Technology to produce more stainless steel raw materials, a move, it said would help assuage tightening supply in the global market.