* China raises short-term rates on first day after long
* Shanghai rebar falls 6.8 pct, Dalian iron ore down 5.4 pct
By Manolo Serapio Jr
MANILA, Feb 3 Chinese steel and iron ore futures
tumbled on Friday after the country's central bank unexpectedly
raised short-term interest rates, spooking financial markets on
the first day back after a week-long Lunar New Year holiday.
While the rate increases were modest, they reinforced views
that Chinese authorities are intent on both containing capital
outflows and reining in risks to the financial system created by
years of debt-fuelled stimulus.
Along with other commodities including copper and
rubber, Chinese investors also sold off equities.
The most-active rebar on the Shanghai Futures Exchange
closed down 6.8 percent at 3,113 yuan ($453) a tonne.
Iron ore on the Dalian Commodity Exchange fell 5.4
percent to end at 611.50 yuan per tonne.
Trading in the physical market was slow with many
participants still on "holiday mode", said a Shanghai-based iron
"But I don't expect to a see a rush of restocking after the
holiday. Many mills have built their stocks long before," he
The weaker futures could drag down spot iron ore prices,
which did not move while China was on holiday.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
was unchanged at $83.34 a tonne from Jan. 26 through Feb. 2,
according to Metal Bulletin.
"Slowing Chinese construction activity in 2017 is expected
to weaken steel demand, and with it, demand for iron ore and
metallurgical coal," National Australia Bank said in a note.
($1 = 6.8675 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Tom Hogue)