SHANGHAI Dec 27 Shanghai steel futures crept up
on Thursday to touch a fresh five-month high, with traders
attributing the gains to a combination of a buoyant outlook as
well as rising costs.
The most active rebar futures contract on the Shanghai
Futures Exchange was up 0.18 percent at 3,885 yuan
($620) a tonne by midday close on Thursday, after easing from a
fresh five-month high of 3,958 yuan a tonne.
"The positive economic data is helping to lift sentiment but
there is also a cost push," said a Shanghai-based trader.
"Iron ore prices have risen about $20 this month and some
players see the strong gains as a sign that steel makers and
traders are willing to pay up because they are optimistic about
The rise in Shanghai rebar followed a 110 yuan per tonne
increase in the price of steel billet in China's key Tangshan
area, traders said, adding that the increase in arrivals have
already pushed up Chinese port prices significantly.
The Metal Bulletin index for 62-percent grade iron ore
.IO62-CNI=SI rose $1.22 from Tuesday to $138.71, the highest
since early May.
The index is on track to rise nearly 19 percent this month,
on par with the sharp rebound seen in September after Beijing
announced the approval of some $160-billion worth of
In a sign that the rally may still a continue, an Australian
cargo of 62 percent grade iron ore was traded at $142 a tonne on
globalORE on Thursday, traders said.
"The recent rally in prices has encouraged more steel mills
and traders to restock in advance because they're anxious that
prices may climb even higher," said a second steel trader.
Separately, data showing strong corporate profits in the
world's top steel maker China also buoyed investors' sentiment.
Profits earned by China's industrial companies jumped 22.8
percent in November from a year earlier, accelerating from
October's 20.5 percent, data from Beijing showed.
Prices on the Steel Index .IO62-CNI=SI and the Platts Iron
Ore Index IODBZ00-PLT were not updated due to the Christmas
($1 = 6.2353 Chinese yuan)
(Reporting by Ruby Lian and Fayen Wong)