Reuters logo
Iron ore tracks China steel prices lower, but demand seen intact
August 30, 2017 / 2:41 AM / 3 months ago

Iron ore tracks China steel prices lower, but demand seen intact

* Low stockpiles of rebar, iron ore in China

* Shanghai rebar down 1.8 pct; Dalian iron ore off 2.4 pct

By Manolo Serapio Jr

MANILA, Aug 30 (Reuters) - Chinese iron ore futures dropped more than 2 percent on Wednesday as a slide in steel prices dragged down the raw material, although firm steel demand in the world’s top consumer of the metal is expected to cap any losses.

The fall in both commodities came after recent rapid gains that stretched the winning streak in rebar steel, used in the construction business, to a fourth straight month in August, and in iron ore to a third consecutive month.

“Prices have gone up quite a lot so sentiment is very fragile,” said Helen Lau, analyst at Argonaut Securities in Hong Kong. The sell-off may be due to short-term traders cashing in on recent market gains, she said.

The most-active rebar on the Shanghai Futures Exchange was down 1.8 percent at 3,829 yuan ($582) a tonne by 0226 GMT.

The most-traded iron ore on the Dalian Commodity Exchange was last down 2.4 percent at 549.50 yuan per tonne after falling as low as 543 yuan, its weakest level since Aug. 17.

Lau said steel demand in China remains supported by steadily growing investment in the country’s property sector, even though the latest data showed a slower increase in fixed-asset investment in the first seven months of 2017.

Stockpiles of rebar at Chinese traders stood at 3.88 million tonnes as of Aug. 25, still less than half of this year’s peak of 8.4 million tonnes reached in February, according to SteelHome consultancy. SH-TOT-RBARINV

That indicated strong demand for rebar, traders and analysts say.

Inventory of iron ore at China’s ports have also been declining, dropping for a fourth straight week to 133.45 million tonnes last week, the lowest since May. SH-TOT-IRONINV

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB slipped 1 percent to $76.36 a tonne on Wednesday, according to Metal Bulletin. ($1 = 6.5841 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Kenneth Maxwell)

Our Standards:The Thomson Reuters Trust Principles.
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