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Shanghai rebar hits record low as China demand wanes
November 16, 2015 / 4:47 AM / in 2 years

Shanghai rebar hits record low as China demand wanes

* Spot iron ore near record low at just above $47/tonne
    * Chinese mills not keen on buying forward ore

    By Manolo Serapio Jr
    MANILA, Nov 16 (Reuters) - Shanghai steel futures fell to a
record low on Monday, deepening losses for producers as
consumption shrinks in top market China and reducing appetite
for cargoes of raw material iron ore.
    Steel consumption in China dropped 5.7 percent to 590.47
million tonnes in January-October, industry group China Iron and
Steel Association said on Friday, as a slowing economy dampens
industrial activity. 
    Chinese steel mills are limiting stocks of iron ore in
response to weak demand, with many producers facing losses that
are forcing them to either cut output or close operations.
    "Some mills are hesitating to take any forward cargoes and
only prefer to buy those arriving in one to two weeks' time.
Anything more than that, there's not much appetite," said a
Shanghai-based iron ore trader.
    The most-traded rebar, a construction steel product, on the
Shanghai Futures Exchange fell to an all-time low of
1,752 yuan ($275) a tonne, and was down 0.2 percent at 1,757
yuan by midday.
    Iron ore for immediate delivery to China's Tianjin port
.IO62-CNI=SI slipped 0.8 percent to $47.40 a tonne on Friday,
according to The Steel Index (TSI).
    The spot benchmark lost more than 4 percent last week, its
seventh weekly fall in eight, and is now close to July's low of
$44.10. That was the lowest level ever based on TSI records that
date back to 2008.
    Stocks of iron ore at Chinese ports kept rising, with weekly
inventory up 550,000 tonnes to 86.55 million tonnes on Friday,
the highest since May, based on data compiled by consultancy
    On the Dalian Commodity Exchange, the January iron ore
contract was up 0.4 percent at 351.50 yuan a tonne.   
  Rebar and iron ore prices at 0427 GMT
  Contract                          Last    Change   Pct Change
  SHFE REBAR MAY6                   1757     -4.00        -0.23
  DALIAN IRON ORE DCE DCIO JAN6    351.5     +1.50        +0.43
  SGX IRON ORE FUTURES DEC         45.45     +0.08        +0.18
  THE STEEL INDEX 62 PCT INDEX      47.4     -0.40        -0.84
  METAL BULLETIN INDEX             48.14     +0.33        +0.69
  Dalian iron ore and Shanghai rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
 ($1 = 6.3782 Chinese yuan)

 (Reporting by Manolo Serapio Jr.; Editing by Richard Pullin)

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