The Chinese steel benchmarks were heading towards a weekly loss — after two straight weekly gains — as the market shrugged off positive headlines around U.S.-China trade talks and new anti-pollution production curbs in Tangshan city.
The most-traded hot-rolled steel coil, used in cars and home appliances, on the Shanghai Futures Exchange fell as much as 1.8% to 3,345 yuan ($471.25) a tonne, its weakest since Aug. 29. It ended the morning session down 1.4%.
Construction material rebar edged down 0.8% to 3,386 yuan a tonne, after hitting a three-week low of 3,372 yuan earlier in the session.
“The combination of weak demand and relatively high supply is weighing on steel prices,” said Richard Lu, senior analyst at metals consultancy CRU in Beijing.
Reports that China’s top steelmaking city of Tangshan has issued new anti-pollution restrictions on mill operations, effective from Oct. 10 up to Oct. 31, did not help to stem the decline in steel futures prices.
The impact of reduced sintering, pelletizing and blast furnace operations of steel mills in Tangshan is expected to be offset, or limited, as production in other places in China continues as normal, Lu added.
Tangshan has issued new guidelines to punish and prosecute companies and individuals found guilty of pollution offences, amid warnings it might miss its air quality goals for this year.
Tangshan’s moves followed China’s environment ministry’s warning last month that the anti-pollution campaign for this year’s autumn-winter heating season will set stricter emissions targets for cities with higher concentrations of damaging particles.
The impact on iron ore futures prices of fresh steel production restrictions in Tangshan was also offset by some restocking demand for the steelmaking raw material.
* The most-traded iron ore on the Dalian Commodity Exchange ended the morning session up 0.8% to 651 yuan a tonne.
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* Prices for spot cargoes of benchmark iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62 dropped to $91.50 a tonne on Thursday, from $94 the day before, based on data from SteelHome consultancy.
* Top U.S. and Chinese negotiators wrapped up a first day of trade talks in more than two months on Thursday as business groups expressed optimism the two sides might be able to ease a 15-month trade war and delay a U.S. tariff hike scheduled for next week.
* The European Commission said on Thursday it had opened an investigation into whether China and Indonesia are dumping hot-rolled stainless steel, used in car frames and machinery, in the European Union.
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