Prices for steelmaking raw materials rose in China on Thursday with coke and coking coal futures set to end three days of losses, buoyed by hopes demand will pick up as steel mills begin to rebuild inventories ahead of the Lunar New Year. Prices of rebar steel, used in construction, edged higher for a second straight session after hitting an eight-day low on Tuesday.
The most-active coke futures, for May delivery, on the Dalian Commodity Exchange were up 1.6 percent at 1,923 yuan ($278.93) a tonne by 0232 GMT, recovering after marking three-week lows. They rose as much as 3.3 percent earlier in the session. Coking coal climbed 1 percent to 1,186 yuan a tonne, off a high of 1,201 yuan.
The most traded iron ore on the Dalian Commodity Exchange inched up 0.1 percent to 491 yuan a tonne. Concerns over waning demand for steelmaking ingredients had pulled down prices in recent sessions, as more steel mills halt operations or reduce output towards the end of the year amid stringent anti-pollution measures over winter.
"We are expecting a further build up of steel inventories at the warehouses (especially as mills switch to using discounted iron ore)," said Darren Toh, steel and iron ore data scientist at Tivlon Technologies, a Singapore-based steel and iron ore data analytics company. "(It) is a clear sign of firm commitment to produce more steel despite margin erosion," he said.
The most-active rebar contract on the Shanghai Futures Exchange rose 0.6 percent to 3,430 yuan a tonne. Hot rolled coil was down 0.5 percent at 3,351 yuan. Spot iron ore for delivery to China climbed 0.7 percent to $72 a tonne on Wednesday, according to SteelHome consultancy.
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