Chinese steel futures range-bound on Omicron coronavirus variant woes

11/28/2021 | 11:02pm

BEIJING, Nov 29 (Reuters) - Steel futures in China traded in a tight range on Monday, hit by fears over the new Omicron coronavirus variant, while coking coal and coke prices fell on a plunge in thermal coal futures.

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

Analysts with CITIC Futures also noted that commodity prices could be pressured by the pandemic situation in the short term but would be supported by easing property policy in the long run.

Construction used steel rebar on the Shanghai Futures Exchange, for May delivery, edged 0.1% higher to 4,187 yuan ($655.77) a tonne as of 0330 GMT.

The January contract of hot rolled coils, used in the manufacturing sector, inched up 0.5% to 4,596 yuan per tonne.

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

Prices for steelmaking ingredients on the Dalian Commodity Exchange were mixed.

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

Spot prices of iron ore with 62% iron content for delivery to China <SH-CCN-IRNOR62>, compiled by SteelHome consultancy, fell $4.5 to $102 a tonne on Friday.

Coking coal and coke futures, however, tracked the drop in thermal coal prices which were down more than 7% in early trade.

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

"Downstream steel demand is relatively weak, the pressure is conducting to coal," according to the CITIC Futures note. "The lenient supply and demand in coking coal could further send down (steelmaking) costs."

($1 = 6.3849 Chinese yuan renminbi) (Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Rashmi Aich)

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