Chinese steel prices stabilize amid good economic news

Finally, there was a glimmer of hope in the steel and iron ore market with the appearance of instructions to local authorities about the possible state stimulation of the economy, which will inevitably affect the world price level. Some stimulus measures have already begun to be implemented to boost business activity.

Iron ore contract prices for September delivery on the Dalian Commodities Exchange climbed CNY 24 per tonne to CNY 717 per tonne, the highest level since May 28 (USD: CNY = 6.298). Rebar contract prices for October delivery rose CNY 36 a tonne on the Shanghai Futures Exchange to CNY 3115 a tonne, the highest since May 29.



However, the modest demand for finished goods at this time could clip the wings of a rapid takeoff. In addition, any talk of a slowdown in economic growth by the government will undermine the stability that has strengthened over the past week.

Over the past 24 hours, the Chinese Long Product Price Index CLPPI has declined by 3 points along with the Chinese Flat Products Price Index CFPPI, which has also declined by 3 points. CHISPI's overall steel bar index also declined by 3 points.

Ferroalloy production in May 2014 in China rose 9.8 percent to 3,209,200 tons from 2,922,500 tons in the same month a year earlier and 4.3 percent from the previous month. In addition, cumulative production from January to May was 15,616,700 tons, up 10.9 from 14,087,600 tons a year earlier.