Shares of steel producers saw some hefty gains Monday in Asia as traders bet on a more upbeat outlook for the metals industry amid signs of a recovery in demand.
The Nikkei 225 Index gained 17.17 points, or 0.2% to 8,924.75.
Hong Kong’s Hang Seng Index picked up 149.64 points, or 1% to 15,750.91
In Japan, Nomura Holdings raised its view on Japan's steel industry to bullish from neutral and raised its prices target on several major stocks.
Nikko Citigroup also raised Nippon Steel's stock rating to buy from hold and raised its target price on JFE Holdings, but kept its buy rating on the latter stock, according to Dow Jones.
The brokerage said both companies are expected to secure margins for higher-than-expected steel prices through negotiations with clients, according to the news report.
On Monday, most regional steel stocks changed hands at sharply higher prices.
In Tokyo, shares of Kobe Steel closed 9.1% higher, and Nippon Steel Corp. gained 4.3%. Sumitomo Metal Industries shot 7% higher.
Some analysts, however, expect steel prices will take some time to book durable gains.
Even so, she still sees the second quarter as a strong season for construction and believes that steel prices will have another rally in May-June on "clearer signs of rising demand."
At the same time, steel production is on the decline.
Crude steel production in Japan stood at 5.74 million metric tons in March, according to data released Monday by the Japan Iron and Steel Federation.
The industry group said the year-on-year percentage drop of 46.7% in monthly output was the largest since January of 1949, according to a report from Reuters.
CHINA
China's government reported last week that its economy grew at a rate of 6.1% in the first quarter, a result Hudson described as "disappointing by most measures."
However, Chinese Premier Wen Jiabao said in reported remarks over the weekend that China's stimulus package was working "better than expected."
And every other major economy, as well as several developing economies, is trying to "spend their way out of this mess via government-sponsored spending on infrastructure," according to one expert.
As a result, "steel prices and companies should see a boom in the upcoming months," he said.
"Given the lead time in planning and delivery, this boom could occur before an actual economic recovery," he said.
In Shanghai, Baoshan Iron & Steel Co. closed up 1.4%, and Angang Steel rose 2.2% in Hong Kong.
Aside from steel, other industrial metals have benefitted from China's stimulus plans.
Copper prices have climbed back above $2 U.S. a pound to their highest levels in about six months on the Comex division of the New York Mercantile Exchange.
Elsewhere:
China’s Shanghai 300 Composite Index gained 56.98 points, to 2,707.67
Singapore’s Straits Times Index slid 21.71 points, or 1.1% to 1,874.85
South Korea’s Kospi Composite Index perked up 7.39 points, or 0.6%, to 1,329
Taiwan’s Taiex Index recovered 26.28 points, or 0.5%, to 5,781.66
New Zealand’s NZX 50 Index stumbled 12.47 points, or 0.5% to 2,698.80
Australia’s S&P/ASX 200 was down 7.7 points, or 0.2% at 3,769.00
