Ferrous futures in top steel producer China rose on Friday, with rebar hitting a one-week high and iron ore set for its third straight weekly gain, buoyed by signs of increased activity in the country’s construction sector and pre-holiday demand.
The most-active January rebar contract on the Shanghai Futures Exchange SRBcv1 ended daytime trade 1.3% higher at 3,766 yuan ($530.61) a tonne, after touching its highest since Sept. 15 at 3,787 yuan.
The most-traded January iron ore contract on the Dalian Commodity Exchange DCIOcv1 climbed 1.3% to 719 yuan ($101.30) a tonne.
On the Singapore Exchange, iron ore’s benchmark October contract was up 0.1% at $98.40 a tonne as of 0700 GMT.
Chinese steel mills have ramped up production this month, with their average daily crude steel output in the 10 days to Sept. 20 hitting a three-month high of 2.89 million tonnes, according to industry data provider.
“Activity in the physical market is also rising, as the industry prepares for the week-long National Day holiday at the start of October,” ANZ commodity strategists said in a note.
An improvement in domestic steel demand and some end-users building inventories ahead of the holiday trimmed stocks held by traders by 1.8% over Sept. 16-22 from a week earlier.
Analysts saw signs of increased construction activity in China, with real estate developer Evergrande’s 668 projects having resumed construction.
Hopes of more stimulus to shore up China’s COVID-hit economy also added to the buoyant mood.
China Development Bank, the country’s largest policy lender by assets, said it will increase the number of infrastructure loans it gives to local governments while prioritising the needs of major economic provinces.
Shangai hot-rolled coil SHHCcv1 rose 1.4%, while stainless steel SHSScv1 dipped 1.5%.
Dalian coking coal DJMcv1 and coke DCJcv1 climbed 0.8% and 0.1% respectively.
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