Chinese steel futures hit a 1-1/2-month high on September 16 on hopes that Beijing will roll out more stimulus measures after latest economic indicators showed deepening slowdown in the world's second largest economy.
China's industrial production grew at the weakest pace in 17-1/2 years in August, a sign of increasing weakness in an economy lashed by trade headwinds and soft domestic demand.
The dismal industrial output figures raised the likelihood of further stimulus from Beijing, which could boost demand for construction and manufacturing materials, analysts said.
The most-active construction steel rebar contract on the Shanghai Futures Exchange rose as much as 1.9% to 3,570 yuan/t ($504.78/t), its strongest since August 1.
Hot-rolled coil, the steel used in cars and home appliances, jumped as much as 1.7% to a 1-1/2-month peak of 3,581 yuan/t.
Possible tighter steel output restrictions in China ahead of the nation's National Day holidays next month and during the winter season later this year are also providing further support to prices.
Beijing is desperate to minimize pollution across northern parts of the country and keep the Chinese capital safer before celebrations of its 70th anniversary on October 1.
Surging oil prices may put further pressure on China and the global economy. Oil futures hit six-month highs on September 16 after weekend attacks on Saudi Arabia's crude facilities knocked out more than 5% of global oil supply.
Most steelmaking raw materials advanced on September 16, with the most-traded iron ore on the Dalian Commodity Exchange, for delivery in January 2020, up as much as 3.4% to 690 yuan/t, its highest since August 7.
Benchmark spot 62% iron ore for delivery to China settled at $95.50/t on September 12.
Coke futures advanced as much as 2.2% to 2,025 yuan/t on September 16, their firmest since August 14. Coking coal, however, was down 0.3% at 1,350 yuan/t, wiping out early gains.
(Writing by Tian Zhang Editing by Tammy Yang)
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