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China iron ore retreats after five-day rally as demand worries surface
November 8, 2017 / 2:29 AM / 15 days ago

China iron ore retreats after five-day rally as demand worries surface

* Shanghai rebar also drops after six-day runup

* Winter production cuts at Chinese steel mills loom

By Manolo Serapio Jr

MANILA, Nov 8 (Reuters) - Chinese iron ore futures fell nearly 1 percent on Wednesday after a five-day runup, underlining demand concerns in the world’s top consumer where steel mills are either preparing to cut or have cut output as part of Beijing’s war against smog.

The slide in iron ore prices followed a retreat in rebar steel futures that came after a six-day rally.

China has ordered industrial plants across the northern part of the country to slash production during winter, including steel producers. Some cities, including top steelmaker Tangshan, have already enforced cuts since October.

The most-traded iron ore contract for January delivery on the Dalian Commodity Exchange was down 0.9 percent at 464.50 yuan ($70) a tonne by 0217 GMT.

“I believe from now on we will see more production cuts in northern China and this will eventually impact iron ore demand,” said an iron ore trader in Shanghai.

China will be releasing its iron ore import data for October on Wednesday. The country’s purchases of the steelmaking raw material hit a record high of 102.83 million tonnes in September, which analysts say showed a preference among Chinese mills for higher quality material to limit carbon emissions.

The most-active rebar on the Shanghai Futures Exchange slipped 1 percent to 3,719 yuan a tonne.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB fell 1.1 percent to $62.66 a tonne on Tuesday, a day after surging 5.8 percent to a six-week top, according to Metal Bulletin. ($1 = 6.6384 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Richard Pullin)

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