* Dalian iron ore turns flattish after falling as much as 2.3%
* U.S. bans travel from Europe, Italy tightens lockdown
By Enrico Dela Cruz
MANILA, March 12 (Reuters) - Iron ore futures in China were flat in volatile trade as the demand outlook clouded for the steelmaking raw material after world health authorities declared the coronavirus a pandemic.
Iron ore’s most-active May contract on the Dalian Commodity Exchange slumped as much as 2.3% to 646 yuan ($92.63) a tonne in early trade before quickly turning flattish by 0306 GMT. Futures on the Singapore Exchange dropped as much as 1.1%.
While more signs have emerged that top steel producer China’s strict measures to contain the epidemic are working, the overall picture is grim and business disruptions are escalating in other parts of the world.
U.S. President Donald Trump suspended travel to the United States from Europe, except the United Kingdom, for 30 days from Friday, while Italy’s 60 million people are under lockdown in a drastic effort to control the damage.
The World Health Organization’s declaration of a pandemic is likely to spur countries to impose border closures and other restrictions, said Robert Carnell, ING head of research for Asia-Pacific.
“While such measures may result in a lower peak of infections within each country, they certainly aren’t without their economic consequences,” he wrote in a note.
China accounts for more than half of the world’s steel output and is also the biggest exporter of the manufacturing and construction material.
Commodity broker Marex Spectron said it has a bearish outlook for iron ore demand and supply and macroeconomic conditions in China.
“Margins continue to be under pressure with the decline in steel prices,” said Marex Spectron analyst Hui Heng Tan. “With pressured margins, it is perhaps unsurprising to see steel rates continue to decline.”
Chinese steel mills and traders are sitting on a huge inventory of steel products that is still piling up because downstream demand is far from fully recovering after the epidemic stalled economic activity in the mainland for weeks.
* Several places in China have lowered their emergency response level to the epidemic, and the mainland has been reporting fewer new infections in recent days.
* Construction steel rebar on the Shanghai Futures Exchange was up 0.3% while hot-rolled coil slipped 0.3% and stainless steel shed 1.4%.
* Coking coal was flat while coke edged up 0.1%.
($1 = 6.9739 yuan)
Reporting by Enrico dela Cruz; editing by Uttaresh.V