SHANGHAI, Oct 14 （Reuters） - Steel prices in the Chinese domestic market inched higher this week as downstream users began replenishing stocks after a week-long national holiday.
Construction steel prices rose to 4,170-4,180 yuan （$625.8） per tonne in Shanghai on Thursday, up from 4,120 yuan per tonne on Sept. 30, according to industry consultancy Mysteel.
Steel prices rose quickly to 4,200 yuan per tonne in the first two days of this week after buyers returned to the market and rushed to build up their inventories after slowing purchases before the holiday.
"Transactions fell before the holiday with end buyers wanting to wait because prices were fluctuating, but now they have been actively purchasing and some warehouses have run out of stock," said a trader in Shanghai.
The benchmark rebar contract on the Shanghai Futures Exchange SRBK1 closed at 4,474 yuan per tonne, up 2.3 percent compared with the closing price before the week-long break.
Over the long term, the market remains uncertain with China's pricing leader Baoshan Iron & Steel Co Ltd （Baosteel） announcing this week that it would keep November prices for its key steel products unchanged from October. Other major mills are also likely to remain cautious.
China, the world's largest steel supplier, is unlikely to see any big upswing in exports, with demand still weak and its price advantage eroded by the steady appreciation of its currency.
Preliminary customs data showed that steel exports stood at 3.01 million tonnes in September, the second lowest since February
However, steel mills are still trying to produce as much as they can despite a government order to curb production in some regions, including the steel heartland of Hebei province.
Data issued by the China Iron & Steel Association on Thursday showed that daily crude steel output in the last ten days of September was 1.678 million tonnes, up 8.5 percent from the previous ten days, signalling that production cuts have had little impact on supply.
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