* Recent selloff in Chinese steel, iron ore futures overdone
* Shares of Asian steelmakers rise despite Trump's probe
By Manolo Serapio Jr
MANILA, April 21 Chinese iron ore futures surged
7 percent on Friday, extending hefty gains for a second session
along with steel prices, after a recent selloff that market
participants thought was overdone.
Both commodities plunged to their lowest since January in
the previous session amid worries over well-supplied markets and
The surge in Chinese futures came as shares of most Asian
steelmakers rose, deflecting the first salvo of a
long-anticipated anti-dumping campaign from U.S. President
Citing concerns about national security, Trump on Thursday
launched a trade probe against China and other exporters of
cheap steel into the U.S. market, raising the possibility of new
The most-active iron ore on the Dalian Commodity Exchange
was up 6.7 percent at 509 yuan ($74) a tonne by midday
break, just off a session high of 511 yuan.
Construction steel product rebar on the Shanghai Futures
Exchange rose 3.5 percent to 2,941 yuan per tonne.
Both iron ore and rebar rebounded sharply at the close on
Thursday after falling to their weakest intraday levels since
Iron ore rode steel's rally this year and was consequently
sold off as steel prices faltered with mills and traders dealing
with big inventories.
In anticipation of brisk demand that typically picks up from
April, China's crude steel output reached a record 72 million
tonnes in March.
"We are still constructive on iron ore, with enough bullish
price indicators to suggest the selloff in recent weeks is
overdone," ANZ commodity strategist Daniel Hynes said in a
"However in the short term, negative sentiment will make it
difficult to arrest the selling and for prices to stabilise.
Once it does, we would look for prices to settle in the
$70-$80/tonne range for the remainder of the year."
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
rose 1.2 percent to $65.36 a tonne on Thursday, according to
Metal Bulletin, gaining for a second session in a row.
Hynes said while market sentiment has recently turned
bearish on the resilience of property and infrastructure
construction in China, the country's steel capacity closure
program remains on track and its economic growth outlook stable.
"We expect the iron ore market to be balanced. In fact with
industry costs starting to rise, key support levels have been
breached, suggesting prices should recover," he said.
Steelmaking coal futures also jumped. Dalian coking coal
climbed 5.5 percent to 1,143 yuan a tonne and coke
rose 5.6 percent to 1,645.50 yuan.
($1 = 6.8790 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Subhranshu Sahu)