December 29, 2016 / 8:32 AM / 3 years ago

China steel prices fall as demand fears return in volatile trade

A labourer works at a cold-rolling mill of the Wuhan Iron & Steel Group on the outskirts of Wuhan, capital of central China's Hubei province August 22, 2006. REUTERS/Alfred Cheng Jin/File Photo

BEIJING (Reuters) - Chinese steel rebar prices fell more than 2 percent, reversing the previous day’s gains, while coke and coking coal remained under pressure on Thursday as concerns about weakening demand returned in volatile end-of-year trading.

“The pullback shows traders are not confident about the steel market and future demand during the winter,” said Wang Yilin, steel analyst at Sinosteel Futures.

The most-active rebar contract for May delivery on the Shanghai Futures Exchange settled down 2.0 percent at 2,951 yuan ($424.35) per ton.

Prices have been seesawing on a daily basis this week amid low turnover with major international exchanges shut for the Christmas holidays and ahead of the New Year.

Iron ore on the Dalian Commodity Exchange rose 0.1 percent to settle at 564.5 yuan a ton.

Steel mills typically curb their output as the construction industry slows during the quieter winter months and ahead of the Chinese Lunar New Year holiday at the end of January.

Factory closures due to widespread pollution across northern China last week renewed concerns that consumption of raw materials like iron ore and coking coal may fall harder than is usual for this time of year.

The most-active coking coal futures on the Dalian Commodity Exchange were down 1.7 percent at 1,163 yuan per ton, after falling to the lowest since Oct. 18 on Tuesday.

Coke fell 2 percent to 1,535 yuan per ton. On Tuesday, prices hit their weakest since Nov. 3.

Reporting by Josephine Mason; Editing by Christian Schmollinger and Biju Dwarakanath

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