Benchmark steel rebar futures in China fell on Monday after an industry body’s forecast for the year rekindled oversupply worries.
The China Iron and Steel Association expects an increasingly obvious trend of oversupply in the sector and pledges to strictly prohibit new steel capacity addition in 2020, according to state-backed China Metallurgical News.
The most-traded steel rebar on the Shanghai Futures Exchange, with May expiry, closed down 1.1% at 3,530 yuan per tonne.
Hot-rolled coil, used in cars and home appliances, fell 0.9% to 3,564 yuan per tonne after the auto industry association reported the 18th straight monthly drop in auto sales in December.
The association also said China’s auto market is likely to shrink for the third consecutive year in 2020 after an 8.2% drop last year.
Steelmaking ingredients also fell, with Dalian coking coal slipping 0.04% to 1,209 yuan per tonne, while coke futures slumped as much as 2.1% to 1,844 yuan per tonne.
The most active coke futures, for May delivery, slid 1.8% to 1,848 yuan per tonne when market closed.
* Iron ore futures on the Dalian Commodity Exchange, for May delivery, faltered 0.4% to 657 yuan per tonne.
* Prices for spot cargoes of iron ore with 62% iron content for delivery to China dropped to $94.7 per tonne on Friday.
* Shanghai stainless steel, for February 2020 delivery, fell 0.2% to 14,205 yuan per tonne.
* China’s yuan, fresh from a second year of weakening against the U.S. dollar, is enjoying an unusual turn as a haven as Washington and Beijing prepare to sign an eagerly awaited Phase 1 trade deal this week.
* China’s Baowu Steel Group is expected to set up a fund with some steel firms to jointly develop overseas iron ore resources, domestic media Caixin reported on Monday.
* Metallurgical coal producer Coronado Global Resources said on Monday it had suspended operations at its only mine in Australia after a worker was killed there.
* China will not make significant cuts to subsidies for new energy vehicles this year, signalling that its policy will remain relatively stable, state media quoted the country’s industry ministry as saying on Saturday.
Source: Reuters (Reporting by Min Zhang and Shivani Singh; Editing by Subhranshu Sahu and Anil D’Silva)