China steel futures rise on Nov factory activity surprise

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Steel futures in China rose in Monday morning trade, extending their gains to a third session, as a surprisingly high gauge of factory activity for November boosted sentiment.

China’s official Purchasing Managers’ Index (PMI) released on Saturday pointed to an unexpected improvement in its manufacturing sector in November, as demand picked up on Beijing’s stimulus measures.

Another private business survey released on Monday also showed total new orders and factory production remained at buoyant levels last month, expanding at the quickest pace in almost three years.

The most-active January contract for hot-rolled coils, which are used in cars and home appliances, on the Shanghai Futures Exchange gained as much as 1.7% to 3,613 yuan ($513.29) per tonne. It was up 1.6% at 3,610 yuan as of 0330 GMT.

The construction steel rebar on the Shanghai bourse jumped 0.5% to 3,637 yuan a tonne.

Building of infrastructure could help support steel product consumption, though demand may ebb as winter progresses, Huatai Futures said in a note on Monday.

Benchmark iron ore futures contract on the Dalian Commodity Exchange for January 2020 delivery rose 0.4% to 648 yuan per tonne.

FUNDAMENTALS

* Other steelmaking raw materials mixed, with Dalian coking coal rising 0.4% to 1,233 yuan per tonne, and Dalian coke down 0.2% at 1,853 yuan per tonne.

* Shanghai stainless steel futures, for February 2020 delivery, dropped 0.6% to 13,970 yuan per tonne.

* Brazilian miner Vale SA said it would resume operation of the Viga concentration plant on Saturday after having halted operations for a few months. The resumption does not change the iron ore and pellets sales forecast for 2019 or the first quarter of 2020.

* Benchmark spot 62% iron ore for delivery to China stood at $89 per tonne on Friday, unchanged from the previous session.

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Reporting by Min Zhang and Dominique Patton; Editing by Muralikumar Anantharaman

Source:www.reuters.com/article/asia-ironore/china-steel-futures-rise-on-nov-factory-activity-surprise-idUSL4N28C0SZ