BEIJING: China’s steel rebar and hot rolled coils futures declined on Thursday, as downstream demand remained sluggish amid the recent outbreak of COVID-19, with falling iron ore prices also weighing on steel prices. Steel consumption in March and April, when is traditional peak season, has been sluggish this year as the pandemic disrupted industrial activities.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) and official data released last week both showed manufacturing activities contracted in March.

A regular state council meeting chaired by Premier Li Keqiang said on Wednesday the government would flexibly use multiple monetary policies in a timely way to support the real economy.

The most-traded steel rebar futures, used as construction material, on the Shanghai Futures Exchange for October delivery fell 1.2% to 5,064 yuan ($796.03) a tonne as of 0320 GMT.

Hot rolled coils, used in cars and home appliances, slipped 1.2% to 5,216 yuan per tonne. The country’s auto industry association expected China’s auto sales to plunge 11% in March on an annual basis. Stainless steel futures on the Shanghai bourse, for May delivery, dipped 0.5% to 20,435 yuan a tonne.

Steel prices were also tracking falling raw material futures prices on the Dalian Commodity Exchange. Benchmark iron ore futures, for September delivery, declined as much as 3.5% to 896 yuan a tonne, retreating from an over 4% jump in the previous session.