China’s steel futures climbed on Thursday on expectations that Beijing’s measures to prop up its epidemic-hit economy will help revive demand for the manufacturing and construction material.
The latest measure is a cut in the benchmark lending rate on Thursday to lower financing costs for businesses hurting from shutdowns and lockdowns intended to contain the coronavirus outbreak.
Such optimism added fuel to the rally in iron ore futures that was initially driven by worries about tightening supplies of the steelmaking raw material from Australia and Brazil.
The Shanghai Futures Exchange’s most-traded construction steel rebar contract, with May expiry, rose as much as 1.7 percent to 3,447 yuan a ton, the highest since Feb. 11.
Hot-rolled steel coil, used in cars and home appliances, jumped 1.4 percent to 3,453 yuan a ton, the strongest also since Feb. 11.
“A number of measures have been intensified … to stabilize the economy,” analysts at Sino-Steel Futures Co Ltd in Beijing said in a note, citing moves by the State Council to reduce social insurance premiums and other measures to aid businesses.
Some of China’s manufacturing hubs, meanwhile, are starting to loosen curbs on the movement of people and traffic, while local governments prod factories to restart production, following weeks of stoppages due to the outbreak. — Reuters
