Shanghai stainless steel rebounds as nickel prices surge

BEIJING : Chinese stainless steel futures snapped a three-session losing streak on Thursday to rise more than 5per cent, buoyed by a surge in steelmaking ingredient nickel prices, although analysts warn that downstream consumption of the metal remains sluggish.

Nickel prices on the Shanghai Futures Exchange jumped as much as 8per cent to a record 161,600 yuan (US$25,283.58) per tonne.

China's imports of nickel ore and nickel pig iron fell 1.6per cent and 12.3per cent, respectively, on a monthly basis in September, data released by the customs office on Wednesday showed.

Stainless steel futures on the Shanghai bourse, for November delivery, gained 4.1per cent to 21,085 yuan per tonne by 0215 GMT. Earlier in the session, they had risen 5.1per cent to 21,280 yuan.

However, analysts say stainless steel consumption is still slow in the short term as recent power rationing has hurt manufacturing activities in the world's second-largest economy.

"Costs at downstream fabricators are rising, (companies) are unwilling to stock up goods, stainless steel transaction is relatively sluggish," analysts with GF Futures wrote in a note.

Other steel prices on the Shanghai exchange were lower. Construction rebar, for January delivery, fell 1.6per cent to 5,325 yuan a tonne and hot rolled coils dipped 0.5per cent to 5,587 yuan per tonne.

Coking coal and coke futures on the Dalian Commodity Exchange extended losses fuelled by China's signal it might intervene to cool prices.

Meanwhile, the securities regulator said late on Wednesday that it would ask futures exchanges to take multiple measures, including raising fees and restricting trading limits, in response to high coal prices.

Dalian coking coal plunged 5.7per cent to 3,333 yuan a tonne and coke futures fell 2.2per cent to 4,073 yuan per tonne.

Benchmark iron ore futures inched up 0.7per cent to 718 yuan a tonne.

(US$1 = 6.3915 Chinese yuan)

(Reporting by Min Zhang and Shivani Singh; Editing by Subhranshu Sahu)