June
15 (Reuters) - Benchmark Shanghai steel futures fell
on Wednesday, with rebar extending losses to a fourth session, as worries grew
that the rainy season would slow construction activity in China already hit by
COVID-19 restrictions.
Data
showing signs of an economic recovery in China last month offered little
comfort to the ferrous commodity market in the world's biggest steel producer.
The
most-traded October rebar contract on the Shanghai Futures Exchange SRBcv1 ended morning trade 1% lower at 4,613 yuan
($686.00) a tonne, after earlier hitting 4,571 yuan, the lowest since May 27.
"Many
areas in China entered the rainy season, which affected (activity at)
construction sites," analysts at Sinosteel Futures said in a note.
"The already weak demand may further decline."
The
benchmark price of hot-rolled coil, which is steel used in car bodies and
appliances, dipped 0.8% on the Shanghai bourse SHHCcv1. Stainless
steel SHSScv1 shed 1%.
The
bearish outlook for steel demand in China also dragged down steelmaking inputs,
with coke on the Dalian Commodity Exchange DCJcv1 falling
2.7%, while coking coal DJMcv1 dropped
1.4%.
Despite
the sluggish demand, China's crude steel output rose 4.1% in May compared with
a month before, as disruptions from COVID-19 lockdowns around the country
gradually eased.
Hopes
for further stimulus support to China's struggling economy helped iron ore
rebound from two-week lows, even as the central bank kept its medium-term
policy rate unchanged for a fifth straight month, as expected.
"The
only engine of economic growth currently is infrastructure investment. Banks
may lower the prime rate on June 20 as the possibility of lockdowns
remains," said Iris Pang, ING chief economist for Greater China.
The
most-active September iron ore contract on the Dalian bourse DCIOcv1 rose 0.7% to 901.50 yuan a tonne.