Chinese steel futures drop on tepid winter demand

steel futures

Chinese steel prices fell on Friday, as demand stood tepid in winter months, weighing down raw materials.

Construction activities have been stalled due to the frigid weather, denting consumption for steel, while other industrial activities slowed down ahead of the Lunar New Year holiday starting mid-February.

“Snows hit more regions in China this week and physical demand has remained weak. Prices could keep fluctuating within a narrow range before spring,” said a steel trader in Shanghai.

Chinese steel mills have been cutting production since mid-November as the government ordered producers in 28 cities to trim output to reduce air pollution, curbing appetite for iron ore and coke, the two main raw materials.

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