Steel Market Update

Advisory Bazaar Info Services

Iron ore futures rose amid expectations of new stimulus measures in China and stronger demand ahead of the peak construction season in September.

* Dalian Commodity Exchange: The January iron ore contract gained 1.77% to 719.5 yuan ($107.01) per metric ton.

* Singapore Exchange: September iron ore prices increased 2.09% to $97.70 per ton.

* China’s Vice Finance Minister announced plans for a new stimulus package aimed at boosting domestic demand and economic growth.

* The National Development and Reform Commission (NDRC) urged local authorities to accelerate major construction projects.

* The blast furnace operating rate at 247 steel mills rose to 82.8%, up 0.16 percentage points from the previous week.

* Analyst Yang Huidan said the market focus is likely to shift from the seasonal off-season slowdown toward expectations of improving demand, which could support a renewed rally in steel prices.

* Prices of other key steelmaking raw materials also advanced, with coking coal up 2.39% and coke up 3.68%.

* Shanghai Futures Exchange: Rebar rose 1.05%, hot-rolled coil gained 1.46%, and stainless steel increased 0.21%, while wire rod declined 0.74%.

Market Outlook: Expectations of additional Chinese stimulus and a recovery in construction activity are providing support to iron ore and steel prices. However, the sustainability of the rally will depend on the pace of improvement in actual downstream demand and infrastructure activity.