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Shanghai rebar falls after 4-day spike on property demand worries
June 13, 2017 / 4:10 AM / 6 months ago

Shanghai rebar falls after 4-day spike on property demand worries

* Dalian iron ore slips 1 pct

* Iron ore at China’s ports at highest level since 2004

By Muyu Xu and Manolo Serapio Jr

BEIJING/MANILA, June 13 (Reuters) - China’s rebar steel futures edged lower on Tuesday after a four- day climb amid concern that a slowing property market may dent steel demand in the world’s top consumer.

China has been restricting real estate purchases across its cities to keep speculation in check and curb soaring prices, with banks also tightening loans to the sector.

“Trading volume and average bids in the property market have been dampened which signals that Beijing’s policy to regulate the real estate sector is working,” said Zou Mingdong, Shanghai-based steel manager at Zhongcai Merchants Investment Group.

But the city of Shanghai appeared to alter a property policy on Monday following protests over the weekend.

The most-active rebar contract on the Shanghai Futures Exchange was down 1.7 percent at 2,979 yuan ($438) a tonne by the midday break. The construction steel product touched an intraday low of 2,976 yuan earlier.

Steel demand is also weak during summer in China, when hot weather in the northern parts of the country and frequent rainfall elsewhere limit construction activity.

As steel prices slid, so did iron ore, with stocks of the raw material still plentiful in China.

The most-traded iron ore on Dalian Commodity Exchange fell 1 percent to 426.50 yuan per tonne.

Stockpiles of imported iron ore at China’s ports reached 140.05 million tonnes on Friday, the most since at least 2004, according to data tracked by SteelHome consultancy. SH-TOT-IRONINV

Port inventory has risen more than 26 percent this year.

“High iron ore inventory will become a regular situation,” said Zou.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 0.9 percent to $54.87 a tonne on Monday, according to Metal Bulletin, tracking gains in Chinese iron ore futures in the prior session. ($1 = 6.7969 Chinese yuan) (Reporting by Manolo Serapio Jr. in Manila and Muyu Xu in Beijing; Editing by Joseph Radford)

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