Chinese Steel Futures Tied To Range Of Omicron Coronavirus Variant Woes

BEIJING, Nov. 29 (Reuters) – China steel futures traded in a narrow range on Monday, affected by fears over the new variant of the Omicron coronavirus, while prices of coking coal and coke fell following a drop in thermal coal futures.

“Affected by the new variant of the coronavirus, steel prices fell during the nighttime session out of panic,” GF Futures wrote in a note, adding that the impact on actual demand and supply for industrial metal could be limited.

CITIC Futures analysts also noted that commodity prices could be put under pressure by the pandemic situation in the near term, but would be supported by an easing of real estate policy in the long term.

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Steel rebar used for construction on the Shanghai Futures Exchange, for delivery in May, rose 0.1% to 4,187 yuan ($ 655.77) per ton at 03:30 GMT.

The January contract for hot-rolled coils, used in the manufacturing sector, rose 0.5% to 4,596 yuan per tonne.

Shanghai stainless steel futures fell 2% to 17,280 yuan per tonne.

The prices of ingredients for steelmaking on the Dalian Commodity Exchange were mixed.

Benchmark iron ore futures jumped 4.7% to 614 yuan per tonne. They jumped 5.2% earlier.

Spot prices for iron ore containing 62% iron for delivery to China, compiled by consultancy SteelHome, fell from $ 4.5 to $ 102 per tonne on Friday.

Coking coal and coke futures, however, followed lower thermal coal prices, which fell more than 7% at the start of trading.

Coking coal and coke fell 1% to 2,072 yuan per tonne and 1.2% to 2,643 yuan per tonne, respectively.

“Downstream demand for steel is relatively low, the pressure is on coal,” according to the CITIC Futures memo. “The lenient supply and demand for coking coal could further lower (steelmaking) costs.”

($ 1 = 6.3849 yuan Chinese renminbi)

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Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Rashmi Aich

Our Standards: Thomson Reuters Trust Principles.

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