Band Enrico Dela Cruz
March 14 (Reuters) – Benchmark steel prices in China hit two-week lows on Monday as a surge in COVID-19 infections at the world’s largest steel producer and consumer of metals stoked concerns over the outlook. economic growth of the country.
Fears of potentially broader and tighter restrictions also weighed on the prices of steel ingredients such as iron ore and coking coal.
Structural steel rebar, for delivery in May, on the Shanghai Futures Exchange SRBcv1 ended trading 4.1% lower at 4,695 yuan ($738.78) a tonne, after touching 4,693 yuan, its lowest since Feb. 28.
Hot rolled coil SHHCcv1 fell 3.5% to 4,950 yuan per ton. It hit 4,945 yuan earlier in the session, its lowest level since March 1.
“China’s COVID-19 outbreak will undoubtedly impact domestic demand for steel, whether the relaxation of ‘zero tolerance’ allows infections to flourish or the government imposes sweeping containment measures. “said Atilla Widnell, managing director of Navigate Commodities in Singapore.
“Therefore, we consider the market to be at a high for the time being until this outbreak runs its course and the stimulus trickles down to actual demand in the second half,” he said in a note. .
The most traded iron ore contract in May on China’s Dalian stock exchange fell 7% to 759.50 yuan a ton. His contract for the first month of April on the Singapore Stock Exchange SZZFJ2 slipped 8.8% to $143.80 a tonne at 07:11 GMT.
Dalian Coking Coal DJMcv1 tumbled 9.8% and coke DCJcv1 fell 7.7%.
Shanghai Stainless Steel SHSScv1 rose 0.3%, bucking the trend amid high nickel commodity prices.
So far this year, China has reported more local symptomatic cases of COVID-19 than it recorded in 2021, as the highly transmissible variant of Omicron sparks outbreaks from Shanghai to Shenzhen.
A resurgence coronavirus at home, a sluggish domestic real estate market, geopolitical tensions could prompt China to further ease monetary policy, despite a widely anticipated interest rate hike by the US Federal Reserve later this week.
(Reporting by Enrico Dela Cruz in Manila; Editing by Rashmi Aich and Subhranshu Sahu)
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