Chinese steel and steel-making raw material retreated when market closed on Monday, despite positive market sentiment as Beijing and Washington moved closer to a trade deal. U.S. President Donald Trump said on Sunday he would delay an increase in tariffs on Chinese goods due to "productive" trade talks. He and Chinese President Xi Jinping would meet to seal a deal if progress continued.
China's official Xinhua news agency also reported that the two countries have made "substantial progress" on specific issues in the latest round of talks. "Trade friction is easing while the Chinese economy is maintaining stability In general, steel would move into a bull market, despite increasing output," according to a note by Jinrui Futures.
Benchmark Shanghai rebar prices lost 0.7 percent to 3,682 yuan ($550.43) a tonne. Hot-rolled coil futures edged down 0.3 percent to 3,678 yuan. The weekly utilisation rates at steel mills across the country edged up to 65.75 percent last week as of Feb. 22, rising 0.14 percentage points from a week earlier, data compiled by Mysteel consultancy showed.
Steelmaking raw ingredients prices also rose, as investors expect mills to replenish inventory after the weeks-long holiday break. Dalian iron ore futures closed down 1.3 percent at 598.5 yuan, after jumping as much as 3 percent during early trade. Coking coal prices climbed 0.5 percent to 1,291 yuan, while the coke contract for May delivery on the Dalian Commodity Exchange dipped 0.3 percent to 2,138 yuan.
Price falling on steelmaking raw ingredients also came as top steelmaking city Tangshan extended second-level smog alert to Mar 2 from scheduled Feb 25 due to adverse weather condition, according to a statement from local government on Monday. Steel mills need to cut at least 30 percent production during the alert period.
On Saturday, an accident at a non-ferrous mine at a subsidiary of Inner Mongolia Xingye Mining Co killed 21 people and injured 29. Xinye has been ordered by local authorities to halt production, and analysts say the accident may lead to safety checks across the region, affecting operations at more mines.
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