Bloomberg reported that steel prices in China, the world’s biggest producer rose to the highest in almost seven months after production cuts reduced supply and as construction companies restocked.
According to the Beijing Antaike Information Development Co domestic prices for hot rolled coil, a benchmark product, rose for a seventh straight day, by 0.3% to CNY 4,450 per tonne the highest since May 12.
According to China International Capital Corp provinces including Hebei, Shandong and Zhejiang started to restrict power supply to steelmakers from September, reducing steel output. Construction sites in China southern provinces are increasing purchases of building materials boosting steel demand.
Mr Luo Wei a Shanghai based analyst with CICC said “December to January is usually the time for construction companies to stock material for use after the Chinese New Year. Building works in the middle and southern regions are also active.”
According to Antaike, prices of reinforcing bars and used in construction, gained 0.4% to CNY 4,607 per tonne the highest since August 2009.
The National Bureau of Statistics said China produced 50.3 million tonnes of crude steel in October, the second lowest amount this year after making 47.9 million tons in September.