Steel prices rise in China amid strong demand

Steel demand in China improved in March as construction work intensified amid warm weather, while steel mills in some northern regions were ordered by the government to cut production to reduce smog. Closing plans could push steel prices up.

Reinforcing bars are the most demanded for construction. The most active rebar contracts on the Shanghai Futures Exchange rose 1.1 percent to close at 3.553 yuan ($ 516) a tonne. They reached a three-year high of 3,648 yuan on Monday.

Iron ore at the Dalian Commodity Exchange ended almost unchanged. The prices of iron ore, the main steelmaking ingredient, were supported by strong demand for steel, traders said. But the rise in prices for iron ore was crowned with a reduction in production at the factories. Iron ore for delivery to the Qingdao port in China is held at $ 91.26 a tonne on Wednesday, below a 30-month high of $ 94.86 hit Feb.21. In addition, at the Dalian Stock Exchange, coking coal rose 1.6 percent and coke rose 1.7 percent.