Reuters reported that Shanghai steel futures edged up on Thursday, backed by official data showing manufacturing activity in China unexpectedly picked up in July, but the modest gains reflect a tentative outlook for steel demand in the world's top consumer.
A rise in new orders lifted China's official Purchasing Managers' Index to 50.3 in July from 50.1 in June, beating estimates for a fall below 50 and offering a sign that the second largest economy could regain its footing.
The most-traded rebar contract for January delivery on the Shanghai Futures Exchange gained 0.2% to close at CNY 3,647 (USD 600) a tonne, off the session's high of CNY 3,660. It touched a three-week low of CNY 3,613 on Wednesday.
The prospect of weak demand for steel in the second-half of the year, however, is still hanging over the market.
An iron ore trader in Shanghai said that "I think we're seeing less demand for steel than what we've seen in the past few weeks. That's definitely reflecting on iron ore since prices at port stocks have been falling.'
Source - Reuters