The Shanghai Futures Exchange underlying steel rebar contract reached 3,843 yuan (approximately $ 573), the highest level since September 2011, and closed 1.4 percent higher at 3,829 yuan a tonne. Hot rolled steel rose 1.7 percent to RMB 3,752 a tonne.
“The current fundamentals of the market are better than in the same period in previous years, as inventories at steel mills and traders are at low levels despite increased production,” analysts at Jinrui Futures say.
China's government planner last week drew up a 2019 urbanization plan aimed at improving infrastructure projects in medium and small towns and expanding transportation systems.
Chinese traders' steel product inventories fell in the sixth week of last week from April 12 to 14.25 million tonnes, with rebar inventories at 7.67 million tonnes and hot rolled coil stocks at 2.24 million tonnes, according to data collected by the consulting company Mysteel.
With the easing of winter restrictions in northern China, steel mills have begun to ramp up production. Utilization rates nationwide rose to 69.48 percent last week, their highest level in nine months.
The increase in steel production has also helped drive demand for steelmaking ingredients.
Coking coal futures on the Dalian Commodity Exchange rose 1.1 percent to 1,326 yuan a tonne, while coke prices rose 2.1 percent to 2,050 yuan a tonne. Iron ore futures are up 653 yuan a tonne, just off the record high of 666 yuan.