March 19, 2020 / 3:48 AM / 18 days ago

China ferrous futures tumble as pandemic panic intensifies

* Dalian iron ore nearly hits 6% downside limit

* Rebar tumbles 6.5%, hot-rolled coil slumps 6.0%

* Miner Vale may temporarily halt activities in Malaysia

By Enrico Dela Cruz

MANILA, March 19 (Reuters) - Iron ore and steel futures in China sank more than 5% in early trade on Thursday as further policy stimulus measures being rolled out across the world failed to allay fears over the economic damage from the coronavirus pandemic.

Iron ore’s most-traded contract on the Dalian Commodity Exchange dropped 5.8% to 639 yuan ($90.46) a tonne, its lowest since March 10, almost hitting the 6% limit for daily losses.

Iron ore futures on the Singapore Exchange fell 3.5%.

On the Shanghai Futures Exchange, construction steel rebar crashed 6.5% to 3,329 yuan a tonne, its weakest since March 2. Hot-rolled coil, steel used in cars and home appliances, shed 6.0% to 3,280 yuan, the lowest since Feb. 4.

“Policymakers around the world are doing what they can, but it is unclear whether that is enough in economies that are likely to be in lockdown for an unknown number of months,” Tapas Strickland, director of economics at National Australia Bank in Sydney, said in a note.

China accounts for more than half of the world’s steel output and about half of total consumption of the manufacturing and construction material.

Beijing was hit by a record number of imported coronavirus infections while new local transmissions in China fell to zero, putting more pressure on the capital to screen out sick passengers and isolate suspected cases.

It is important to keep an eye on how successful the gradual lifting of containment measures in China will be, and whether it can avoid re-infection, Strickland added.

In the Asia Pacific, a major market for China’s steel products, Moody’s Investors Service warned “the intensification of the outbreak will prompt significant economic weakening as slowing domestic consumption exacerbates disruptions to supply chains and cross-border trade of goods and services.”

FUNDAMENTALS

* Other steelmaking ingredients on the Dalian Commodity Exchange slid, with coking coal down 2.3% as of 0310 GMT, while coke slumped 4.9%.

* Stainless steel futures fell 2.5%.

* Brazilian iron ore miner Vale SA said on Wednesday it may temporarily halt activities at its Malaysian distribution center between March 21-31, as part of efforts to safeguard employees from the coronavirus.

* Industry benchmark 62% iron ore’s spot price stood at $92.50 a tonne on Wednesday, the highest since Feb. 24, based on data from SteelHome consultancy. SH-CCN-IRNOR62

($1 = 7.0641 yuan)

Reporting by Enrico dela Cruz; Editing by Devika Syamnath

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