Chinese steel and iron ore futures rose slightly on Wednesday, but gains were kept in check as investors eyed the expected expiry of winter restriction on steel production at the end of the week.
“Despite booming demand in downstream sectors, the market remains worried about increasing supply ... as investors generally expect that output curbs will be eased in April,” said analysts from Orient Futures in a note.
Local governments in northern China ordered heavy industry, including steel mills, to cut production in November to March in order to improve air quality. But they have not said if the restrictions will be completely removed in April.
Some steel mills resumed some operations last week, with utilisation rates rising to 63.4 percent as of March 22 from 62.3 percent a week earlier, according to data compiled by Mysteel consultancy.