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UPDATE 1-Dalian iron ore reverses gains, ends lower as China imports drop
December 8, 2014 / 7:53 AM / 3 years ago

UPDATE 1-Dalian iron ore reverses gains, ends lower as China imports drop

* China exports rise less than forecast, imports fall

* China Nov steel exports at record high

* Shanghai rebar also retreats (Recasts, adds comment, updates prices)

By Manolo Serapio Jr

SINGAPORE, Dec 8 (Reuters) - Dalian iron ore futures slipped from a three-week high to end more than 1 percent lower on Monday after data showed China’s imports of the steelmaking raw material fell to the second lowest level this year.

Shanghai rebar futures also retreated after rising with iron ore earlier in the day as both commodities tracked the rally in Chinese equities.

China’s iron ore imports fell 15.1 percent from October to 67.4 million tonnes in November, reflecting slow buying interest in the world’s top importer on expectations of further price declines.

“We’ve been expecting the relatively high levels of imports to weaken as steel demand faltered and clearly that’s occurred in November,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“The market will definitely take it bearishly,” said Hynes, adding the weaker Chinese steel market may lead to a further drop in iron ore imports over the next couple of months.

Iron ore for May delivery on the Dalian Commodity Exchange closed 1.4 percent lower at 481 yuan ($78) a tonne after rising as high as 497 yuan in morning trade.

The May rebar contract on the Shanghai Futures Exchange dropped 0.8 percent to end at 2,542 yuan a tonne, after rising more than 1 percent earlier.

Amid slower demand at home, China’s steel exports rose to a record 9.72 million tonnes in November.

China’s overall exports rose well below forecast last month and imports shrank in another sign that the world’s second-largest economy could be facing a sharper slowdown.

Spot iron ore prices have fallen more than 47 percent this year as large, low-cost miners such as Vale, Rio Tinto and BHP Billiton boosted output amid slowing demand growth in top buyer China.

Iron ore for immediate delivery to China’s Tianjin port .IO62-CNI=SI slipped 0.3 percent to $70.90 a tonne on Friday, according to The Steel Index. The price fell to $68 on Nov. 26, the lowest since June 2009.

CME Group, the biggest operator of U.S. futures exchanges, on Monday launched trading and clearing of lower grade iron ore futures <0#1ITC:>.

The new cash-settled contract for 58-percent grade iron ore for delivery to China will add to CME’s current suite of iron ore futures and options, including the 62-percent futures contracts. The Singapore Exchange plans to unveil a similar product early next year. Rebar and iron ore prices at 0724 GMT Contract Last Change Pct Change SHFE REBAR MAY5 2542 -20.00 -0.78 DALIAN IRON ORE DCE DCIO MAY5 481 -7.00 -1.43 SGX IRON ORE FUTURES JAN 69.61 -0.97 -1.37 THE STEEL INDEX 62 PCT INDEX 70.9 -0.20 -0.28 METAL BULLETIN INDEX 71.77 +0.52 +0.73 Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.1596 Chinese yuan) (Editing by Sunil Nair)

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