Meanwhile, Chinese stainless steel futures dropped more than 3%, declining for a fourth straight session.
China is grappling with a power shortage recently, which has halted plants in major industrial hubs, including Guangdong and Jiangsu due to energy consumption controls and shortage in coal supply.
Related: What is behind China’s power crunch?
“Downstream consumption for stainless steel has been constrained, especially in Guangdong province,” said Fu Zhiwen, an analyst with Huatai Futures.
The most-traded stainless steel on the Shanghai Futures Exchange, for November delivery, declined 1.4% to 19,735 yuan ($3,052.02) per tonne.
Shipping costs
China’s energy crisis has sent shipping costs spiraling as the Asian country snaps up coal to keep powering its economy this winter.
Giant Capesize commodity carriers — used to haul coal — are now earning almost $75,000 a day, the most since 2009. Those earnings are up more than 50% so far this month as a scramble to procure coal for power generation coincides with already-strong demand for industrial commodities.
“There is so much demand at the moment, it’s both coal and iron ore,” said Ulrik Andersen, chief executive officer of Golden Ocean Group, which owns 56 capesize freighters.
“We see a very, very strong market that is well reflected in rates that are going up. As we see it right now we don’t see why it wouldn’t continue for at least this week.”
(With files from Reuters and Bloomberg)
