December 8, 2017 / 8:22 AM / 4 months ago

UPDATE 1-Iron ore, coking coal cut losses in China as steel regains ground

* China Nov iron ore imports 5th highest on record

* Tighter coking coal supply may fuel recovery -Argonaut

* Pullback in raw materials followed rally to 3-month highs (Adds China import data, analyst comment, updates prices)

By Manolo Serapio Jr

MANILA, Dec 8 (Reuters) - Chinese iron ore and coking coal futures pared losses on Friday after steel prices recovered some lost ground and data showed China’s imports of iron ore surged last month despite curbs as part of the country’s war against smog.

China’s imports of iron ore in November were the fifth highest on record at 94.54 million tonnes, up 18.9 percent from the previous month, according to customs data.

“This should also dispel concerns that the closure of steel mills is materially impacting demand. In fact, it shows that higher grade ore from exporters such as Australia and Brazil is keenly sought,” ANZ commodity strategist Daniel Hynes said in a note.

The most-traded iron ore for May delivery on the Dalian Commodity Exchange closed down 1.2 percent at 506.50 yuan ($77) a tonne, after falling as much as 4.4 percent at one stage.

Coking coal ended 3.6 percent lower at 1,265.50 yuan per tonne, well off the day’s trough of 1,215 yuan. Coke closed down 2.2 percent at 2,065 yuan, also recovering from an intraday low of 1,948 yuan.

The reduced losses followed a recovery in rebar futures on the Shanghai exchange which ended 0.5 percent higher at 3,895 yuan a tonne, after sliding nearly 2 percent in morning trade.

China’s curbs on steel output to fight smog during winter have reduced inventories and output at the world’s top producer, helping fuel a rally in steel prices to three-month highs earlier this week, gains tracked by iron ore and coking coal.

“Prices rose too fast and there has to be some consolidation,” said Helen Lau, analyst at Argonaut Securities in Hong Kong. “The market’s been really quite volatile, and this volatility started in bulks and then spread to base metals.”

Lau said supply of coking coal remains tight, which should support a recovery in prices.

Along with slower imports, coking coal inventory at 100 independent coke plants in China dropped 19 percent from a year ago to 6.8 million tonnes for the week to Dec. 1, said Lau.

In contrast, stockpiles of imported iron ore at China’s major ports reached 141.67 million tonnes as of Dec. 1, the highest since at least 2004, according to data tracked by SteelHome consultancy. SH-TOT-IRONINV

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB fell 5.3 percent to $65.70 a tonne on Thursday, according to Metal Bulletin.

That was the steepest single-day decline since May 5 for the spot benchmark, which hit a nearly three-month high on Monday, following a slide in Chinese iron ore futures on Thursday. ($1 = 6.6145 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Joseph Radford and Amrutha Gayathri)

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