AGL 38.89 Increased By ▲ 0.87 (2.29%)
AIRLINK 206.84 Increased By ▲ 9.48 (4.8%)
BOP 9.52 Decreased By ▼ -0.02 (-0.21%)
CNERGY 6.20 Increased By ▲ 0.29 (4.91%)
DCL 9.14 Increased By ▲ 0.32 (3.63%)
DFML 37.94 Increased By ▲ 2.20 (6.16%)
DGKC 97.60 Increased By ▲ 0.74 (0.76%)
FCCL 35.64 Increased By ▲ 0.39 (1.11%)
FFBL 88.94 Increased By ▲ 6.64 (8.07%)
FFL 13.89 Increased By ▲ 0.72 (5.47%)
HUBC 130.01 Increased By ▲ 2.46 (1.93%)
HUMNL 13.61 Increased By ▲ 0.11 (0.81%)
KEL 5.42 Increased By ▲ 0.10 (1.88%)
KOSM 7.21 Increased By ▲ 0.21 (3%)
MLCF 44.70 No Change ▼ 0.00 (0%)
NBP 60.74 Decreased By ▼ -0.68 (-1.11%)
OGDC 218.99 Increased By ▲ 4.32 (2.01%)
PAEL 40.90 Increased By ▲ 2.11 (5.44%)
PIBTL 8.42 Increased By ▲ 0.17 (2.06%)
PPL 198.00 Increased By ▲ 4.92 (2.55%)
PRL 39.85 Increased By ▲ 1.19 (3.08%)
PTC 27.50 Increased By ▲ 1.70 (6.59%)
SEARL 107.50 Increased By ▲ 3.90 (3.76%)
TELE 8.59 Increased By ▲ 0.29 (3.49%)
TOMCL 35.94 Increased By ▲ 0.94 (2.69%)
TPLP 13.73 Increased By ▲ 0.43 (3.23%)
TREET 24.38 Increased By ▲ 2.22 (10.02%)
TRG 61.15 Increased By ▲ 5.56 (10%)
UNITY 33.00 Increased By ▲ 0.03 (0.09%)
WTL 1.68 Increased By ▲ 0.08 (5%)
BR100 11,996 Increased By 269.5 (2.3%)
BR30 37,173 Increased By 796.8 (2.19%)
KSE100 112,417 Increased By 2903.4 (2.65%)
KSE30 35,457 Increased By 943.9 (2.73%)

Shanghai steel futures stretched gains to touch a two-week high on Monday following recent similar rises in raw material iron ore, although a shaky demand outlook capped the upside. China's steel demand is likely to shrink for a third year in a row, even as an early-year rally in prices helped many Chinese mills return to profitability, Wang Liqun, vice chairman of the China Iron and Steel Association said last week.
China's crude steel consumption slipped 1.9 percent over January to July, said Wang. Morgan Stanley said the sharp increase in raw material prices and moderating demand growth should slow or partly reverse this year's gains in profitability among global steelmakers, "thus increasing cyclical earnings risks".
"While it is too early to quantify the impact of those trends on steel margins, we argue that slowing demand growth is likely to erode some pricing power of steel producers, all else equal," Morgan Stanley said in a report. The most-traded rebar, a construction steel product, on the Shanghai Futures Exchange, closed up 0.8 percent at 2,316 yuan ($347) a tonne. It rose to as much as 2,353 yuan earlier, its strongest since September 12. A key risk to steelmakers' profit margins, Morgan Stanley says, is the surge in coking coal prices which has far outpaced the gains in steel prices. Driven by a shortage in China and supply disruptions in Australia, spot Australian premium hard coking coal has soared 164 percent this year to $206.40 a tonne on Friday. Shanghai rebar futures have risen 37 percent.

Copyright Reuters, 2016

Comments

Comments are closed.