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Chinese steel futures slumped on Monday, falling around 3% amid concerns of regulatory disruptions after Premier Li Keqiang pledged to strengthen control of raw materials, though demand for industrial metals remains robust.
“Overall economy and operation of enterprises have continued to recover, but surging international commodity prices have brought great pressure on companies’ costs,” official Xinhua news agency cited a symposium chaired by Li last week.
Li asked to strengthen market regulation of raw materials to ease the cost pressure of companies, according to Xinhua.
The most active steel rebar on the Shanghai Futures Exchange , for October delivery, fell as much as 2.9% to 4,937 yuan ($753.44) a tonne. The contract closed down 2.0% at 4,985 yuan.
Hot-rolled coils futures, used in cars and home appliances, dropped 2.1% to 5,265 yuan at close. It slipped 3.1% earlier during the session.
Demand for the steel products, however, remained strong at downstream users. China’s Baoshan Iron & Steel had raised its hot-rolled and cold-rolled prices for May delivery by 400 yuan and 150 yuan per tonne, respectively.
Stainless steel on the Shanghai bourse plunged 3.4% to 14,060 yuan per tonne.
Prices for steelmaking ingredients on the Dalian Commodity Exchange were mixed.
Benchmark iron ore futures, for September delivery, reclaimed lost ground and rose 2.6% to 1,014 yuan at market close.
Dalian coking coal gained 1.0% to 1,599 yuan a tonne, while coke fell 1.1% to 2,387 yuan per tonne.
Spot prices of iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62 stood at $172 a tonne on Friday, up by $1.5 from the previous session, according to SteelHome consultancy.