Chinese steel and steel-making raw material prices rose on Monday, buoyed by positive market sentiment as Beijing and Washington moved closer to a trade deal.
U.S. President Donald Trump said on Sunday he would delay an increase in tariffs on Chinese goods due to “productive” trade talks. He and Chinese President Xi Jinping would meet to seal a deal if progress continued.
China’s official Xinhua news agency also reported that the two countries have made “substantial progress” on specific issues in the latest round of talks.
“Trade friction is easing while the Chinese economy is maintaining stability ... In general, steel would move into a bull market, despite increasing output,” said analysts from Jinrui Futures in a note.
Benchmark Shanghai rebar prices edged up 0.3 percent to 3,721 yuan ($557.51) a ton as of 0157 GMT.
Hot-rolled coil futures rose 0.5 percent to 3,708 yuan.
The weekly utilization rates at steel mills across the country edged up to 65.75 percent last week as of Feb. 22, rising 0.14 percentage points from a week earlier, data compiled by Mysteel consultancy showed.
Steelmaking raw ingredients prices also rose, as investors expect mills to replenish inventory after the weeks-long holiday break.
Dalian iron ore futures were trading up 1 percent to 612.5 yuan a tonne, after jumping as much as 3 percent during early trade.
Coking coal prices climbed 0.3 percent to 1,288.5 yuan, while the coke contract for May delivery on the Dalian Commodity Exchange rose 0.6 percent to 2,157 yuan.
On Saturday, an accident at a non-ferrous mine at a subsidiary of Inner Mongolia Xingye Mining Co killed 21 people and injured 29.
Xinye has been ordered by local authorities to halt production, and analysts say the accident may lead to safety checks across the region, affecting operations at more mines.