Consumption demand has increased sharply while production has been limited, which has pushed up the price of construction steel and hot rolled coil in China in recent years.
October steel bar price at Shanghai exchange increased 3.9% to 3,966 yuan / ton (US $ 577.22 / ton), the highest level since August 2011.
HR coil price also increased by 5.9% to a record high of 3,928 yuan / ton, according to Refinitiv Eikon.
According to data analysis company Tivlon Technologies, the demand for steel in China increased sharply. "We are optimistic about the profit margins of the steel industry in the next 10 weeks in China, amid limited supply from some provinces," said Darren Toh, a data science expert at Tivlon.
Steel prices in China are the highest since August 2011. Photo: Reuters.
However, the price of raw materials was opposite.
Iron ore prices delivered in September at Dalian Exchange fell 3.5% to 793.5 yuan / ton, after reaching a record high on June 20.
Supply of iron ore at ports decreased because demand increased while imports from Brazil decreased. According to SteelHome data, ore inventories at ports dropped to 116.75 million tons by the end of last week, down 1.95 million tons from the previous period. This situation is expected to continue to support ore prices in the future.
In addition, the price of coking coal fell 1.6% to 1,366.5 yuan / ton. In contrast, the price of coke increased 2.3% to 2,121 yuan / ton. China 's coal supply is forecast to decline as the Shanxi provincial government requires 82 coal mines in the first five months of this year or stop production or stop construction because of safety concerns.
Source: Cafef