Chinese steel

Steel futures in China traded in a tight range, weighed down by worries about the new Omicron coronavirus variant while coking coal and coke prices fell in response to a drop in thermal coal futures.

Steel prices fell during the night session due to the panic caused by the new coronavirus variant. Analysts at CITIC Futures also noted that the pandemic situation could put pressure on commodity prices in the short term but that easing property policy would support them in the long run.

On the Shanghai Futures Exchange SRBcv1, construction used steel rebar for May delivery rose 0.1 percent to 4,187 yuan per tonne.

The January contract for hot-rolled coils SHHCcv1, used in the manufacturing sector, rose 0.5 percent to 4,596 yuan per tonne.

SHSScv1 Shanghai stainless steel futures fell 2% to 17,280 yuan per tonne.

On the Dalian Commodity Exchange, prices for steelmaking ingredients were mixed.

The benchmark iron ore futures DCIOcv1 increased by 4.7 percent to 614 yuan per tonne. They had previously increased by 5.2 percent. 

Oil price Up

Oil was up in Asia on Monday morning, recouping some of Friday’s losses. Investors went bargain hunting. However, concerns about discovering a new omicron COVID-19 variant and the restart of the Iran nuclear deal negotiations remained.

Brent oil futures were up 4.62 percent to $74.90, while WTI futures were up 5.24 percent to $71.72. Concerns about the new variant and a potentially large supply surplus in the first quarter of 2022 drove the black liquid down by more than 10% on Friday. This was its most significant one-day drop since April 2020.

The World Health Organization stated that it is unclear whether omicron is more transmissible or dangerous than other variants. However, it is a variant of concern. The OPEC and broader OPEC+ meetings will go ahead as planned on Wednesday and Thursday. The cartel will decide whether to proceed with its plan to increase output by 400,000 barrels per day beginning in January 2022 and continuing.

Some investors have called for a halt to these increases after the United States led a coordinated release from the Strategic Petroleum Reserve last week, as well as the potential impact of omicron on fuel demand.