February 14, 2020 / 4:34 AM / 4 days ago

China iron ore set for biggest weekly gain in 5 months on supply concerns

* Dalian, Singapore iron ore retreat after 3-day rally

* China reports additional 5,090 coronavirus cases

* Steel group seeks govt help as virus hits operations

By Enrico Dela Cruz

MANILA, Feb 14 (Reuters) - China’s iron ore futures were on track for their biggest weekly gain since September on Friday amid renewed concerns over seaborne supply and despite demand disruptions due to the coronavirus outbreak.

The Dalian Commodity Exchange’s most-traded iron ore contract, with May expiry, traded in a tight range before ending the morning session down 0.2% at 621 yuan ($88.96) a tonne.

But with three straight days of gains beginning Tuesday that swept prices to three-week highs, the contract is poised for its biggest weekly rise since September.

On the Singapore Exchange, the most-active April contract fell 1.2% to $84.20 a tonne in early trade, also after a three-day rally.

China’s coronavirus outbreak showed no sign of peaking with health authorities on Friday reporting more than 5,000 new cases.

China’s steel industry is already feeling the pain from sluggish demand amid disruptions to economic activity and government-imposed curbs to restrain the epidemic.

Its severity suggests disruptions “will continue for some time”, Britain-based brokerage SP Angel said in a note.

As roadblocks hamper transport of raw materials and steel products, the China Iron and Steel Association appealed to the government for “forceful measures” to keep the mills running.

Steel stocks are rising rapidly and will continue to build as resumption of work at factories and construction sites hinges on the success of virus containment efforts, Sino-Steel Futures Co Ltd in Beijing said in a note.

Despite weak demand, spot prices of iron ore rose for a third straight day to fresh three-week highs on Thursday, with the benchmark 62% grade settling at $88.50 a tonne, data from SteelHome consultancy showed, amid concerns over supply. SH-CCN-IRNOR62

FUNDAMENTALS

* China’s iron ore imports in February are running well below preceding months and the corresponding month last year, according to vessel-tracking and port data compiled by Refinitiv.

* Traders at Chinese ports were reluctant to sell iron ore at low prices, said metals data provider MySteel, after Brazilian miner Vale SA scaled down its outlook for first-quarter production following heavy rains that hampered operations.

* Construction steel rebar on the Shanghai Futures Exchange dropped 0.5% while hot-rolled steel coil, used in cars and home appliances, dipped 0.2%.

* Dalian coking coal was virtually flat while coke slumped 0.5%. ($1=6.9810 yuan) (Reporting by Enrico dela Cruz; Editing by Arun Koyyur)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below