China's efforts to boost lending lifted Shanghai steel futures by half a percent on Monday after seven straight days of losses, but the modest gain suggests steel demand will remain weak until Beijing eases property market curbs.

The most traded May rebar contract on the Shanghai Futures Exchange closed up by CNY 21 at CNY 4,178 per tonne off a session high of CNY 4,192.

China on Saturday said that it would cut the amount of cash banks need to keep with the central bank reflecting that Chinese authorities are comfortable that inflation and property prices are under control thus supporting commodity demand and prices. The 50 basis point cut, estimated to free up between CNY 350 billion to CNY 400 billion in additional liquidity, was the second reduction in Chinese banks' reserve requirement ratio RRR since November and takes effect on February 24.

But some traders said the rate cut would do little to spur steel demand. A trader said “The key thing that will push up steel prices sharply would be demand from the housing property market, and we believe that the Chinese government will not loosen its grip on the market.”

(Sourced from Reuters)