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Dalian iron ore falls for third day as steel resumes decline
June 8, 2017 / 2:33 AM / in 4 months

Dalian iron ore falls for third day as steel resumes decline

* Losses come ahead of China trade data

* Spot iron ore drops to lowest in almost a year

By Manolo Serapio Jr

MANILA, June 8 (Reuters) - Iron ore futures in China dropped for a third session in a row on Thursday, reflecting weak appetite for the raw material as steel prices resumed their decline.

Losses in Chinese futures could drag spot iron ore prices further, having fallen to their lowest level in a year on Wednesday.

The most-active iron ore contract for September delivery on the Dalian Commodity Exchange was down 1.4 percent at 425.50 yuan ($63) a tonne by 0221 GMT.

“Iron ore consumption has come under pressure as Chinese steel mills look to spend funds on loan repayments due at the end of the quarter,” Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB slid 1.1 percent to $55.43 a tonne, the lowest level since July last year, according to Metal Bulletin.

The spot benchmark, which touched $94.86 in February, has lost almost 30 percent this year, underperforming other commodities such as nickel and oil.

China will release trade data later on Thursday that would show how much iron ore it imported last month. Imports by the world’s top buyer of the commodity fell to a six-month low in April.

After an early-year surge driven by Beijing’s infrastructure spending, Chinese steel prices have fallen 15 percent from this year’s peak as construction demand tapers off during summer.

The most-traded rebar on the Shanghai Futures Exchange was last down 1.1 percent at 2,933 yuan per tonne. The construction steel product touched a one-month low on Tuesday, but rebounded on Wednesday to snap a nine-day slide.

Globally, BMI Research said it was keeping its average steel price forecast of $530 a tonne for this year and $500 in 2018. That compares to $484 last year.

“This reflects our belief that prices will trend lower in the second half of 2017 from current spot prices as a result of resilient Chinese production growth on the back of low iron ore and coking coal prices,” BMI said in a report.

Chinese mills produced a record 72.78 million tonnes of crude steel in April, breaking the previous all-time high set in March.

$1 = 6.7953 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Sunil Nair

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