Chinese steel futures declined by over 2% and hot rolled coils futures slipped 3% on Monday following the comments from Chinese Premier Li Keqiang that urged “greater regulation of raw material prices to ease the cost pressure of enterprises amid rising global commodities prices.” However, the demand for steel products remained strong.
Steel rebar, hot rolled coils futures decline
The most actively traded rebar contract for October delivery tumbled 2.6% to 4,953 yuan ($755.42) a tonne as of 0253 GMT on the Shanghai Futures Exchange, while hot rolled coils futures slipped 3.1% to 5,211 yuan per tonne.
Benchmark iron ore futures on the Dalian Commodity Exchange dropped 0.9% to 980 yuan a tonne, the Dalian coking coal dipped 0.7% to 1,572 yuan, and coke slipped 2.5% to 2,354 yuan a tonne.
Government control on raw material prices
Official Xinhua news agency reported that Li asked to strengthen market regulation of raw materials to ease the cost pressure of companies.
Xinhua noted: “Overall economy and operation of enterprises have continued to recover, but surging international commodity prices have brought great pressure on companies’ costs.”
Despite the comments from Li, the demand for the industrial metals remained robust at downstream users. China’s Baoshan Iron & Steel had increased its hot rolled prices for May delivery by 400 yuan per tonne while the cold rolled prices for May delivery moved up by 150 yuan per tonne.