Aug 23 (Reuters) - China's iron ore and
steel prices rose on Tuesday, as the government's latest rate cut boosted
sentiment while demand prospect also looked set to improve ahead of peak season
for construction steel.
The
most traded January iron ore on the Dalian Commodity Exchange DCIOcv1 rose
2.8% to 707 yuan ($103.20) a tonne at the midday break, and Shanghai Futures
Exchange's most-active rebar contract SRBcv1 advanced 1.6% to 4,051 yuan a tonne.
On
the Singapore Exchange, the most-traded September contract SZZFU2 rose
1.9% to $103.65 a tonne at 0327 GMT.
"Usually
September and October are the peak construction months. (There is a) rush to
complete projects before the winter comes and it gets too cold. We are already
almost at the end of August," said Zenon Ho, an analyst at broker Marex.
China on Monday cut benchmark lending rates and lowered the mortgage reference
by a bigger margin to boost its economy hurt by COVID-19 outbreaks and a
property crisis, which also lifted prices of industrial metals.
There
were signs of possible iron ore inventory drawdown this week, with Mysteel data
showing portside stockpiles in China fell 0.3% week-on-week to 138.6 million
tonnes on Monday, Ho said.
Meanwhile,
hot temperature in China is expected to ease soon, Ho said, allowing more
construction activities to resume and potentially more industrial enterprises
to restart after being halted to reserve scarce electricity.
But
longer-term outlook remained cloudy as COVID-19 resurgence and a global
economic growth slowdown continued to weigh on steel demand.
"The
rate cut is also helpful, but the more help you need for a specific industry,
the more glaring the weaknesses are," Ho added.
ShFE
hot-rolled coil SHHCcv1 rose
1.7% to 3,947 yuan a tonne, stainless steel SHSScv1 increased 1.2% to 15,470 yuan a tonne, Dalian
coking coal DJMcv1 jumped
2.8% to 1,973.50 yuan a tonne and coke DCJcv1 was up 1.5% at 2,608.50 yuan a tonne.