China's steel futures extend gains on rising demand

Steel futures in China rose for a second consecutive session on Wednesday after the two-month lockdown in the Chinese city of Wuhan ended, raising hopes of an increase in demand as economic activities resume in the country.

Wuhan, where the coronavirus first broke out, started to allow people to leave the city if they were healthy, as new infections in the city dropped to a trickle in the past three weeks.

Construction rebar futures, for May delivery, rose 0.9% to 3,244 yuan ($459.28) per tonne, after having closed 0.1% higher on Tuesday. Hot-rolled coil, used in cars and home appliances, gained 1.8% to 3,113 yuan per tonne. The contract had closed 0.9% higher in the previous session.

Shanghai stainless steel futures rose 1% to 12,155 yuan per tonne. Aiding sentiment was the government's pledge on Tuesday to stabilize and further expand consumption of new energy vehicles in China.

Meanwhile, ferrous futures in China jumped in early trade, propped up by demand hopes amid restoration of activities in the world's second-biggest economy. Benchmark iron ore futures on the Dalian Commodity Exchange, for May delivery, surged as much as 2.8% to 652 yuan per tonne. It was up 2.5% to 649 yuan a tonne as of 0330 GMT.

Dalian coking coal jumped 1% to 1,225 yuan a tonne and Dalian coke climbed 0.9% to 1,761 yuan per tonne. The number of confirmed infections of the novel coronavirus exceeded 1.34 million globally and the death toll crossed 76,000, according to a Reuters tally as of 1400 GMT.

According to state media, digger sales at some major producers such as XCMG Construction Machinery Co Ltd and Sany Heavy Industry Co Ltd rose 34.7% and 14.2% on an annual basis, respectively. Australia's Pilbara Port Authority said iron ore exports to China jumped 21.6% to 40.43 million tonnes in March from the month earlier.

Nippon Steel Corp, Japan's biggest steelmaker, will temporarily shut two blast furnaces in Japan later this month to cope with declining demand due to the coronavirus pandemic, it said late on Tuesday.

BHP Group, said a "small number" of its total workforce had been confirmed with COVID-19, but it had not impacted operations at any of its operations.