Chinese stainless steel futures fell by 2% in their first session of trading on September 25, after U.S. President Donald Trump's stinging rebuke of China fanned demand concerns amid a bruising trade war between the world's two biggest economies.
The front-month February 2020 stainless steel contract fell to a low of 15,280 yuan shortly after it opened 10 yuan lower at 15,575 yuan/t ($2,190.88/t) on the Shanghai Futures Exchange (ShFE). It was down 0.1% at 15,575 yuan by 0233 GMT.
Trump delivered a stinging rebuke to China's trade practices on September 24 at the United Nations General Assembly, saying he would not accept a "bad deal" in U.S.-China trade negotiations.
"Trump's speech cast a pall on investor sentiment, and that's hurting a lot of commodities markets," said Daniel Hynes, a senior commodity strategist at ANZ Research.
Stainless steel inventory in the world's top producer and consumer of the metal has been rising amid a downbeat demand outlook.
The inventory has doubled from the start of the year and was at 588,000 tonnes as of September 12, according to data from Argonaut Securities. From a year-ago level, it was up 37%.
"The launch of stainless steel futures provides an effective risk management tool for companies," said ShFE Chairman Jiang Yan in a speech during the opening ceremony for stainless steel futures.
"It will also enhance China's pricing influence as the world's biggest stainless steel producer and consumer."
(Writing by Emma Yang Editing by Harry Huo)
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