* Shanghai rebar down nearly 3 pct
* Coking coal, coke also slide again
* China Caixin PMI shows contraction in May
(Updates prices, adds China Caixin PMI)
By Manolo Serapio Jr
MANILA, June 1 Chinese iron ore futures slumped
more than 5 percent to a six-month low on Thursday, after
sliding 6 percent in the previous session, amid persistent
concern over surplus supply that has pushed the market well into
bear market territory this year.
Spot iron ore prices have dropped 40 percent from this
year's peak, closing out May at about $57 a tonne, the weakest
in more than seven months.
"Oversupply concerns were driven by strong seaborne supply
and subdued restocking demand" after China's public holidays,
Commonwealth Bank of Australia analyst Vivek Dhar said in a
Chinese markets reopened on Wednesday after public holidays
on Monday and Tuesday.
The most-active iron ore contract on the Dalian Commodity
Exchange dropped as much as 5.4 percent to 415 yuan
($61) a tonne, its lowest since November 2016. It closed down
4.2 percent at 420 yuan.
"Availability is not an issue, so fundamentally that is the
problem," said Kelly Teoh, broker at Clarksons Platou Futures.
"Also we're coming towards the summer where construction is
going to pace down and globally when you look at things, we're
not as robust as we were."
Steel consumption in China, the world's biggest consumer and
producer, typically eases during summer along with construction
A private business survey on Thursday showed China's
manufacturing activity unexpectedly contracted in May, fuelling
worries that the economy may be cooling more rapidly than
expected. That contrasted with a government reading on Wednesday
that suggested a modest but steady pace of growth from the
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
slid 2.5 percent to $57.02 a tonne on Wednesday, the lowest
since mid-October, according to Metal Bulletin.
The spot benchmark lost 17 percent in May, its steepest
monthly decline in a year.
On the Shanghai Futures Exchange on Thursday, construction
steel product rebar fell 2.8 percent to end at 3,092
yuan per tonne.
Steelmaking coal also extended losses. Coking coal on the
Dalian exchange closed 4.1 percent lower at 950.50 yuan a
tonne, after falling as far as 935.50 yuan, its weakest since
October. It dropped by the exchange-set limit of 9 percent on
Coke declined 3.7 percent to 1,430.50 yuan a tonne.
($1 = 6.7985 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford and