Chinese steel futures extend gains on restocking

SHANGHAI, Jan 22 (Reuters): Chinese steel futures rose for a fifth session on Monday as some traders were restocking ahead of the Lunar New Year holiday next month, helping drive up prices for raw materials.

The most active rebar on the Shanghai Futures Exchange had gained 1.5 per cent to 3,941 yuan ($615.25) a tonne by 0230 GMT.

"Steel consumption remains weak in winter months, but some traders were restocking ahead of the Lunar New Year holiday, and the market is watching out for the extent to which demand will recover after the holiday," said an analyst with a small-sized fund in Shanghai, declining to be named as he was not authorised to speak to media.

"The environmental crackdown will remain an important factor on supplies this year."

China has for the first time imposed mandated output curbs at steel mills, coke plants and other industrial producers in 28 cities between mid-November and mid-March to fight pollution. The curbs are extended to other regions when smog worsens.

Iron ore on the Dalian Commodity Exchange climbed 1.2 per cent to 543.5 yuan a tonne. Coke jumped 2.9 per cent to 2,023 yuan a tonne and coking coal climbed 1.4 per cent to 1,296.5 yuan.

Iron ore for delivery to China's Qingdao port advanced 2.5 per cent to $76.75 a tonne, according to Metal Bulletin.