February 6, 2020 / 8:32 AM / 22 days ago

UPDATE 1-China iron ore futures rebound on U.S. import tariffs cut

* Dalian iron ore ends up 0.9%

* Spot iron ore rebounds on stimulus hopes

* Coking coal, coke futures extend rally (Recasts with China tariff cut for U.S. goods, adds chart)

By Enrico Dela Cruz

MANILA, Feb 6 (Reuters) - China’s iron ore futures rebounded on Thursday from a three-day selloff, after Beijing announced tariff cuts on a slew of U.S. imports, bringing in some relief to financial markets unsettled by a fast-spreading coronavirus outbreak.

The Dalian Commodity Exchange’s most-traded iron ore contract ended up 0.9% at 590 yuan ($84.64) a tonne after earlier losses. On the Singapore Exchange, the front-month April contract rose 1.1% at $79.40 a tonne.

Benchmark Dalian iron ore shed 11.3% between Monday and Wednesday on concerns over demand in the world’s top importer of the steelmaking raw material due to the coronavirus epidemic.

“The coronavirus outbreak will dampen economic growth in China this year, but the scale of the impact remains uncertain and will depend on its duration and intensity,” Fitch Ratings said.

While iron ore prices are widely expected to continue normalising this year after the 2019 surge due to tight supply concerns, the fall this week was the sharpest in six months.

The epidemic, which has killed 563 people in China, has prompted restrictions on movement of people and transportation, disrupting many businesses.

The Lunar New Year holiday, which officially ended on Feb. 2, has been extended in some places to contain the outbreak.

Much of China’s industry plans to return to work on Feb. 10, in line with the official guidance, but not all workers are expected to report back on that date, ING commodity strategists wrote in a note.

“Markets remain very sensitive to any developments related to the coronavirus,” they said.

FUNDAMENTALS

* China said it would halve additional tariffs levied against 1,717 U.S. goods last year, following a Phase 1 trade deal that brought truce to a bruising tariff dispute.

* Amid optimism over China’s stimulus measures, spot iron ore prices rose on Wednesday, with the benchmark 62% iron-content ore for delivery to China settling at $83.80 a tonne, rebounding from three-month lows, SteelHome consultancy data showed. SH-CCN-IRNOR62

* Iron ore supply may pile up at China’s ports in the near term as more shipments arrive from Brazil and Australia.

* The China Iron and Steel Association has asked firms to maintain stability amid fluctuations in steel prices caused by slumping demand.

* The most-traded construction steel rebar contract on the Shanghai Futures Exchange firmed 0.1%, while hot-rolled steel coil gained 0.1%.

* Other ferrous raw materials extended gains, with coking coal rising 2.5% and coke gaining 1.0% on supply concerns.

* Shanghai stainless steel futures were up 0.1%.

($1 = 6.9703 yuan)

Reporting by Enrico dela Cruz; Editing by Subhranshu Sahu

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