China steel prices at nine-week high, iron-ore demand congests ports
Steel prices are at a nine-week high and according to China Security News, a steel industry association official has said there is space for a further rise.
The surge in demand has caused congestion at Chinese ports off-loading iron-ore that is contributing to rising ocean freight rates. The Baltic Dry Index, a gauge of commodity shipping costs, advanced a 14th day. The steel industry accounts for almost half of all dry-bulk cargo.
With a 7.5 percent tumble in hot-rolled steel prices traded in Shanghai last week, it is clear demand is mainly driven by rod products for the construction boom being initiated by China’s economic stimulus plan.
Wuhan Iron & Steel Co., China's fifth largest steel producer, was among the companies who raised March price. Tangshan Iron & Steel Co. (000709,SZ), the pulicly traded unit of China's second-biggest steelmaker, surged 10 percent limit. Angang Steel Co.(000898,SZ;00347,HK), China's second-biggest mill, rose 5.08 percent on Shenzhen trading.
China Cosco (601919,SH; 01919,HK), the world's largest operator of dry-bulk ships, rose the 10 percent limit. Rizhao Port Co.(600017,SH), China's largest iron ore port, rose 9.07 percent.
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