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China steel, iron ore recover on possible U.S.

Prices of steel and iron ore regained some lost ground in China on Thursday after the United States invited Chinese officials for talks, spurring hopes of a deal to end a trade dispute between the world’s two largest economies.

Washington has sent an invitation to senior Chinese officials for talks in coming weeks, the White House’s top economic adviser said on Wednesday, as the Trump administration prepares to activate tariffs on $200 billion worth of Chinese goods.

The news helped stem selling in ferrous metals following steep losses in the past two days on worries over excess steel supply as China considers a flexible implementation of its production curbs.

The most actively traded rebar, for January delivery, on the Shanghai Futures Exchange ended 0.3 percent higher at 4,071 yuan ($595) a tonne.

Hot rolled coil rose 1.1 percent to 4,013 yuan per tonne.

“With both parties scheduled to resume trade talks, it should be viewed in a positive light,” Stephen Innes, head of Asia-Pacific trading at OANDA brokerage, said in a note to clients.

But the limited gains in rebar prices suggest many in the market remain cautious over the possibility of modified production curbs in China.

The country is considering allowing its northern provinces to decide individual output cuts by heavy industry to rein in emissions during the winter, a source involved with the plan said on Tuesday.

“Although we have not had an official confirmation of this directive just yet, output enforcement will likely not be as strict should regional authorities be charged with monitoring output,” said INTL FCStone commodity consultant Edward Meir.

Coking coal futures on the Dalian Commodity Exchange rose 1.9 percent to 1,287 yuan a tonne and coke eased 0.2 percent to 2,253 yuan.

Dalian iron ore climbed 3 percent to 503.50 yuan per tonne.

Spot iron ore for delivery to China’s Qingdao port .IO62-CNO=MB inched up 0.3 percent to $67.86 a tonne on Wednesday, according to Metal Bulletin.

Source: Reuters

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