Steel futures climb again on more restrictions

Chinese rebar and hot rolled coil futures have kept rising as expectations of production cuts were strengthened by new restrictions starting from Thursday in Fengrun, Tangshan, as well as restrictions in Handan, Kallanish notes

On 21 April on the Shanghai Futures Exchange, October 2021 rebar futures closed CNY 23/tonne higher than Tuesday at CNY 5,188/t ($798/t), and the same contract for HRC closed up CNY 55/t at CNY 5,484/t.

A total of 522,000 tonnes of steel products is expected to be reduced due to the latest restrictions in Fengrun (see separate article). Half of the vehicle transport capacity for the steel industry has already been banned in the region. 

Handan City in Hebei province also announced its plan to limit production from 21 April to 30 June. Designated inspectors will be placed in steel and coking companies to supervise the implementation of restriction measures. The specific reduction ratio will be released according to the rating of local enterprises, and may be adjusted due to changes in air quality. The ratios were not yet available by Wednesday evening.

By Kallanish Team