Wed, 9 Oct 07:45:00 GMT
* Near-term outlook stays firm
* Mills expected to restock raw material
(Updates Shanghai rebar close)
SHANGHAI, Oct 9 (Reuters) - Chinese steel futures edged up on Wednesday, recovering from three-month lows, on expectations users will start restocking after a week-long holiday, although the prospect of waning demand during winter may curb gains.
Steel demand in China, the world's top producer and consumer, typically starts to taper off in November and December as the cold weather hampers activity in the construction sector, the biggest steel consumer.
"If prices can keep steady at current levels, users would be willing to return to market to restock as demand stays firm at the moment," said a Shanghai-based steel trader.
The most-traded rebar contract for January delivery on the Shanghai Futures Exchange climbed 0.7 percent to close at 3,589 yuan ($590) a tonne. It slumped as low as 3,541 yuan on Tuesday, its weakest since July 2.
For iron ore, prices are expected to stay firm this week as mills return to market to build up inventories after a week-long national holiday between Oct 1-7.
"Steel mills have started to look for cargoes and they would come back to market to restock this week and next," said an iron ore trader in Beijing.
Benchmark 62 percent grade iron ore <.IO62-CNI=SI> steadied at $131.70 a tonne on Tuesday, up 30 cents from Monday, according to data provider the Steel Index.
Iron ore swaps cleared by the Singapore Exchange <0#SGXIOS:> inched up slightly across the board on Tuesday, with the November contract rising $0.38 to $126.25 a tonne.
Shanghai rebar futures and iron ore indexes at 0739 GMT
Contract Last Change Pct Change
SHFE REBAR JAN4 3589 +26.00 +0.73
THE STEEL INDEX 62 PCT INDEX 131.7 +0.30 +0.23
METAL BULLETIN INDEX 131.97 +0.56 +0.43
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.1211 Chinese yuan)
(Reporting by Ruby Lian and Fayen Wong; Editing by Richard Pullin)