September 11, 2017 / 2:44 AM / 9 months ago

China steel, iron ore drop for 5th day; but outlook still upbeat

* Dalian iron ore hits lowest in nearly one month

* Peak seasonal demand for steel in China in Sept-Oct

By Manolo Serapio Jr

MANILA, Sept 11 (Reuters) - Chinese iron ore futures fell to their weakest level in almost a month on Monday, dropping for a fifth session along with steel prices as investors pared positions in the two commodities although the outlook for demand remained bright.

The losses were in line with a retreat in other China-traded commodities, with rubber sliding 3 percent and nickel down more than 4 percent.

The most-active iron ore on the Dalian Commodity Exchange fell as far as 519 yuan ($80) a tonne, the lowest since Aug. 16. The contract has cut losses by 0225 GMT when it stood at 537.50 yuan, down 1.5 percent.

Iron ore demand in China, the world’s top importer of the steelmaking commodity, remains firm particularly for high-grade material, said a Shanghai-based trader.

“Mills are looking for high-grade (iron ore) and they’re willing to pay the market level,” he said. “I think the futures market is not impacting the physical market.”

Futures prices have been in a range between 500 yuan and 600 yuan, he said, adding that only a drop below 500 yuan could fuel a more sustained decline in prices.

Reflecting firm appetite for the raw material, stocks of iron ore at China’s ports dropped for a sixth straight week to 133 million tonnes on Friday, according to SteelHome consultancy. SH-TOT-IRONINV

That was the lowest inventory at the ports since early May.

The most-traded rebar on the Shanghai Futures Exchange eased 1.1 percent to 3,918 yuan a tonne, but also off the session’s low of 3,835 yuan.

As with iron ore futures, Monday marked the fifth straight session of losses for the construction steel product which touched 4,194 yuan on Sept. 4, its loftiest since February 2013.

On the ground in China, the outlook for steel demand is good “because we are in the peak season for demand”, said the Shanghai trader.

Chinese steel demand tends to pick up in September and October after the summer lull as construction activity increases. ($1 = 6.4980 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)

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