Shanghai steel futures shoots up to a one month high, posting a third consecutive weekly gain on Friday
[China’s low inflation number for February has given the market something to cheer. Price pressures are easing, and so the great Chinese credit taps can heave back into life---enough to start the credit easing??].
Reuters reported that Shanghai steel futures rose to a one month high, posting a third consecutive weekly gain on Friday after data showed that China has more room to boost liquidity raising investor hopes for an increase in demand from the world's top steel user.
The most active October rebar contract on the Shanghai Futures Exchange rose as high as CNY 4,325 per tonne before closing at CNY 4,319 up 0.9%. For the week rebar gained 0.6%.
China annual consumer inflation slowed to a 20 month low of 3.2% in February and factory output and retail sales also cooled more than forecast, giving policymakers scope for further monetary loosening to support flagging growth.
Mr Matt Fusarelli analyst at Australia based consultancy AME Group said "Inflation is particularly politically sensitive in China compared with other parts of the world, and we will see more relaxation of reserve requirement ratios after the latest data. We are seeing steel prices stabilize and they have lifted in some parts of China. Some of the big inventories have been drawn down so we expect better performance in iron ore prices as well in the next quarter."
The figures the first to be released for 2012 suggest a more rapid increase in output than predicted that could help allay at least some of the gloom that has descended on China steel sector with daily runs recovering from 1.6827 million tonnes in December.
Consultancy Umetal said offer prices for imported ore in China fell by a dollar per tonne on Friday after prices dropped at recent sale tenders by miners.
The most active October rebar contract on the Shanghai Futures Exchange rose as high as CNY 4,325 per tonne before closing at CNY 4,319 up 0.9%. For the week rebar gained 0.6%.
China annual consumer inflation slowed to a 20 month low of 3.2% in February and factory output and retail sales also cooled more than forecast, giving policymakers scope for further monetary loosening to support flagging growth.
Mr Matt Fusarelli analyst at Australia based consultancy AME Group said "Inflation is particularly politically sensitive in China compared with other parts of the world, and we will see more relaxation of reserve requirement ratios after the latest data. We are seeing steel prices stabilize and they have lifted in some parts of China. Some of the big inventories have been drawn down so we expect better performance in iron ore prices as well in the next quarter."
The figures the first to be released for 2012 suggest a more rapid increase in output than predicted that could help allay at least some of the gloom that has descended on China steel sector with daily runs recovering from 1.6827 million tonnes in December.
Consultancy Umetal said offer prices for imported ore in China fell by a dollar per tonne on Friday after prices dropped at recent sale tenders by miners.
Source-Reuter
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