May 24, 2018 / 2:50 AM / 3 months ago

China steel extends losses on tepid spot trade, iron ore recovers

* Rebar futures set to drop for fifth day, coke for sixth

* Lukewarm demand in spot markets continues to weigh on sentiment

BEIJING, May 24 (Reuters) - China’s benchmark construction steel futures extended losses into a fifth session on Friday, with lukewarm demand in spot markets continuing to weigh on sentiment.

The most-traded steel rebar contract, for October delivery, on the Shanghai Futures Exchange had dipped 0.3 percent to 3,532 yuan ($552.95) a tonne by 0214 GMT.

“Prices of physical steel products have fallen sharply amid waning trading volumes ... which suppressed market sentiment and may keep steel prices at a low level,” analysts from CITIC Futures said in a note in Mandarin, adding that total trading volume across the country had been declining for four days.

Spot steel product prices fell 0.5 percent to 4,276.22 yuan a tonne on Wednesday, a level not seen for nearly three weeks, data from Mysteel consultancy showed.

Steelmaking raw materials continued to drop on Wednesday, alongside steel prices, with coke falling for a sixth day.

“Mills are not active in replenishing their stockpiles at the moment, as they plan to restock when prices fall further,” said a Shandong-based coke trader. He declined to be identified as he was not authorised to speak with media.

The most-traded coke futures on the Dalian Commodity Exchange sank 0.7 percent to 1,971 yuan a tonne after plunging as much as 4.8 percent in the previous session.

Coking coal prices declined 0.8 percent to 1,181.5 yuan a tonne.

Dalian iron ore futures rose for the first time in six sessions on Thursday, edging up 0.7 percent to 457.5 yuan a tonne.

“Iron ore prices have already fallen to a low level ... and the market thinks there is only limited room for prices to decline further,” said the analysts at CITIC Futures.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB fell for a fifth straight day on Wednesday, hitting its lowest level since April 9 at $64.11 a tonne. ($1 = 6.3875 Chinese yuan renminbi) (Reporting by Muyu Xu and Josephine Mason Editing by Joseph Radford)

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