Chinese steel futures prices jumped again on Tuesday as they continued to see-saw on sentiment. Mills have been reporting that their steel sales are picking up, while market inventories began to ease lower in recent days, Kallanish notes.

On the Shanghai Futures Exchange the May rebar contract closed CNY 92/tonne higher than Monday at CNY 3,815/t ($567/t), while the same contract for hot rolled coil closed up CNY 84/t at CNY 3776/t.

As demand recovers slowly for construction steels, longs prices should remain supported. Mills appear confident enough in their steel sales that they are showing more interest in restocking iron ore (see separate article). Overall however, the market has remained tight due to limited production in the last few weeks, and this has been key in forcing inventories to top out over the last week. The seasonal uptick in prices may not yet have run its course, despite the looming problems with demand this year.