Reuters reported that Shanghai steel futures slipped on Thursday as faster than expected inflation in China doused hopes of further monetary easing any time soon.

The most traded May rebar contract on the Shanghai Futures Exchange dropped by 0.9% to close at CNY 4,297 a tonne, falling for a third time in four sessions.

China's annual inflation rate accelerated to a three month high of 4.5 percent in January, well ahead of market expectations and breaking a five-month trend of easing price pressures as consumers increased spending during the Lunar New Year holiday season.

The latest inflation data gives Beijing limited room to aggressively ease liquidity conditions in the near term, economists said, some of whom had been looking at another cut in Chinese banks' reserve requirement ratio before March.

Tight credit had dented steel demand in China and many in the industry were hoping Beijing would continue slashing banks' reserve requirement after cutting them for the first time in three years in November.

(Sourced from Reuters)