November 20, 2014 / 4:47 AM / 3 years ago

Dalian iron ore futures steady after slump

* Spot iron ore fell to $70/T on Wed, lowest since 2009
    * China factory growth stalls in November

    By Manolo Serapio Jr
    SINGAPORE, Nov 20 (Reuters) - China's iron ore futures
steadied on Thursday as sellers paused after sending prices down
more than 6 percent in the past two sessions to stretch this
year's rout in the glut-hit commodity.
    Spot iron ore prices fell to their lowest level since 2009
on Wednesday as Dalian futures lost more ground, with buying
interest limited even though traders cut offers for physical
cargoes. 
    At $70 a tonne, iron ore is now within striking distance of
record lows of around $59 since pricing data was available in
late 2008.
    This week's slide was fueled by data on Tuesday that showed
a deeper decline in home prices in China which buys around
two-thirds of the world's iron ore.
    The "selling pressure could extend into the coming week as
fundamentals remain unbalanced and supply overhangs dominate the
market landscape," said Kash Kamal, analyst at Sucden Financial.
    Iron ore for May delivery on the Dalian Commodity Exchange
 was little changed at 477 yuan ($78) a tonne by
midday, after hitting a record low of 469 yuan in the prior
session.
    Iron ore for immediate delivery to China .IO62-CNI=SI fell
nearly 3 percent to $70 a tonne on Wednesday, the lowest since
June 2009, according to data compiled by The Steel Index.
    Increased iron ore output from big, low-cost producers such
as Rio Tinto and Vale has deepened a supply
glut at a time when China's economy is slowing. 
    There was more evidence of weakness in China's economy on
Thursday as growth in its factory activity stalled in November,
with output shrinking for the first time in six months, a
private survey showed. 
    Spot iron ore prices have slumped almost 48 percent this
year.
    "Mills were not buying iron ore in the last few days. In a
falling market, people would rather wait," said an iron ore
trader in Shanghai.
    
  Rebar and iron ore prices at 0359 GMT
                                                                                     
  Contract                          Last    Change   Pct Change
  SHFE REBAR MAY5                   2444     -1.00        -0.04
  DALIAN IRON ORE DCE DCIO MAY5      477     +1.00        +0.21
  SGX IRON ORE FUTURES DEC         69.95     +0.61        +0.88
  THE STEEL INDEX 62 PCT INDEX        70     -2.10        -2.91
  METAL BULLETIN INDEX              70.2     -1.60        -2.23
                                                                                     
                                                                                     
  Dalian iron ore and Shanghai rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
 (1 US dollar = 6.1230 Chinese yuan)

 (Editing by Muralikumar Anantharaman)

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