Shanghai stainless steel rebounds as nickel prices surge, other ferrous metals tumble

10/21/2021 | 03:45am

Oct 21 (Reuters) - Chinese stainless steel futures snapped a three-session losing streak on Thursday, buoyed by a surge in steelmaking ingredient nickel prices, although analysts warn that downstream consumption of the metal remains sluggish.

Nickel prices on the Shanghai Futures Exchange jumped as much as 8% to a record 161,600 yuan ($25,283.58) per tonne.

China's imports of nickel ore and nickel pig iron fell 1.6% and 12.3%, respectively, on a monthly basis in September, data released by the customs office on Wednesday showed.

Stainless steel futures on the Shanghai bourse, for November delivery, ended up 1.1% at 20,470 yuan per tonne. Earlier in the session, they had risen 5.1% to 21,280 yuan.

However, analysts say stainless steel consumption is still slow in the short term as recent power rationing has hurt manufacturing activities in the world's second-largest economy.

Other ferrous metal prices in China plunged in afternoon trading, with coking coal, coke and construction rebar all dived to daily trading limits on falling coal prices and stagnant steel consumption.

The securities regulator said late on Wednesday that it would ask futures exchanges to take multiple measures, including raising fees and restricting trading limits, in response to high coal prices.

Coking coal futures on the Dalian Commodity Exchange slumped 12% to 3,109 yuan a tonne, while coke was also down 12% at 3,664 yuan a tonne.

They have dropped 19.2% and 17.5%, respectively, from record highs logged earlier this week.

Benchmark iron ore futures on the Dalian bourse plummeted 8.7% to 651 yuan per tonne.

Steel rebar on the Shanghai exchange dropped 8% to 4,976 yuan a tone. Hot rolled coils declined 6.2% to 5,268 yuan per tonne.

Apparent consumption of five main steel products in China, including rebar and hot rolled coils, fell 7.5% to 9.26 million tonnes as of Thursday from a week earlier, data from Mysteel consultancy showed. ($1 = 6.3915 Chinese yuan) (Reporting by Min Zhang in Beijing and Tom Daly; Editing by Subhranshu Sahu)

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