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Shanghai rebar climbs to 2-week high on demand hopes

Published 18/05/2017, 05:29 pm
© Reuters.  Shanghai rebar climbs to 2-week high on demand hopes

* Rebar stocks at Chinese traders down 46 pct from Feb

* Dalian iron ore slips after rising almost 5 pct on Weds

By Manolo Serapio Jr

MANILA, May 18 (Reuters) - Shanghai steel futures rose for a third straight day on Thursday, supported by hopes that demand in top consumer China would remain healthy and as Beijing eases up on a deleveraging drive.

Stocks of construction-used rebar held by Chinese traders stood at 4.51 million tonnes as of May 12, down 46 percent from a 10-month high in February, according to data tracked by SteelHome consultancy. SH-TOT-RBARINV

The most-active rebar on the Shanghai Futures Exchange SRBcv1 closed up 2.5 percent at 3,144 yuan ($456) a tonne, after touching a two-week top of 3,159 yuan.

"Robust manufacturing activity and infrastructure spending will likely support steel demand through 2017," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

Dhar said expectations of government-backed investment in infrastructure have been spurred by Chinese policymakers looking to shore up economic growth before elections in the fourth quarter.

He added that China appeared to be easing on its deleveraging drive, also boosting sentiment towards mining commodities.

The People's Bank of China said last week it would continue to push for deleveraging to fend off financial risks, but with appropriate "speed and rhythm" to stabilise market expectations. usually helps commodity demand by allowing China's debt-laden commodity intensive sectors more freedom," said Dhar.

Iron ore on the Dalian Commodity Exchange DCIOcv1 eased 0.9 percent to 468.50 yuan per tonne after advancing nearly 5 percent on Wednesday.

"The global iron ore market will stay well supplied over our forecast period to 2021," BMI Research said.

"Expanding output in Brazil and India and a gradual slowdown of steel demand in China will remain the main drivers behind ample global stocks."

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB rose 1.7 percent to $62.20 a tonne on Wednesday, according to Metal Bulletin. ($1 = 6.8943 Chinese yuan)

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