Steel futures in China fell on the second day, as the sluggish real estate market affected the forecast for steel demand, while the growth in metal stocks last week also affected demand.
Sales of real estate in Beijing during a week-long vacation from October 1 to 7 decreased, and sales of new homes in the government reached their lowest level since 2014, according to CCTV.
The most active steel rebar construction contract on the Shanghai Futures Exchange (ShFE) for January delivery fell 1.1% to 3,390 yuan ($ 474.81) per tonne. It closed at 0.4% to 3413 yuan.
Futures for hot-rolled steel coils used in automobiles and household appliances, with January shipments to ShFE, fell 0.2% to 3428 yuan per ton.
Steel reserves in China totaled 11.4 million tons as of October 7, up 594,100 tons from the week ending September 26, but still the second lowest since late June, according to Mysteel consulting company.
“The restrictions on output have eased after the National Day holiday, which has put pressure on the supply side,” writes Huatai Futures. According to him, the opportunities for recovery are limited, since the January contract is seasonally weak.
The most actively traded iron ore futures contract on the Dalian Commodity Exchange for delivery in January 2020 fell 2.9% to 639 yuan per ton, stopping at a rally of five sessions.
