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Shanghai rebar tumbles 5 pct to record low, drags down ore
July 6, 2015 / 3:30 AM / 2 years ago

Shanghai rebar tumbles 5 pct to record low, drags down ore

* Rebar, iron ore futures hit daily downward limit
    * Big fall in billet surprises market, further hitting
sentiment Iron ore falls to lowest level since April 23

    SHANGHAI, July 6 (Reuters) - Chinese rebar futures slumped 5
percent to hit a fresh record low on Monday amid market fears
that demand in the world's top producer was weakening further,
prompting mills to cut output and reduce consumption of raw
material iron ore.
    The most traded October rebar futures contract on the
Shanghai Futures Exchange tumbled to a low of 2,027
yuan ($326.54) a tonne, the lowest since the contract launched
in 2009, hitting its daily downside limit. 
    A sluggish economy and a property downturn in China has hit
steel demand and prices, with steel mills suffering growing
losses and curtailing output. 
    "The market fundamentals are too weak. Mills are making
losses while traders don't want to stock," said Li Wenjing, an
analyst with Industrial Futures in Shanghai. "An increase in
iron ore port inventories last Friday and a big decline in
billet prices have dampened the market today."
    Iron ore stocks at 42 Chinese ports rose 1.7 percent to
81.97 million tonnes on Friday from a week before, data from
industry consultancy Umetal showed.
    Prices of billet, a semi-finished steel product whose price
often affects general market sentiment, dropped by 70 yuan to
1,730 yuan a tonne over the weekend, exceeding market
expectations, traders said.
    The most active September iron ore futures on the Dalian
Commodity Exchange touched the daily downside limit of
4 percent, falling for the seventh day to 394.5 yuan a tonne,
the lowest level since April 23. 
    The spot price for ore delivered into Tianjin port
.IO62-CNI=SI sank 3.1 percent on Friday to $54.1 per tonne,
also the seventh consecutive daily decline and the lowest level
since April 23.     
  Rebar and iron ore prices at 0259 GMT                                   
  Contract                          Last    Change   Pct Change           
  SHFE REBAR OCT5                   2029   -105.00        -4.92           
  DALIAN IRON ORE DCE DCIO SEP5    394.5    -16.00        -3.90           
  SGX IRON ORE FUTURES JUL          51.4     -1.77        -3.33           
  THE STEEL INDEX 62 PCT INDEX      54.1     -1.70        -3.05           
  METAL BULLETIN INDEX             55.26     -0.37        -0.67
  Dalian iron ore and Shanghai rebar in yuan/tonne                        
  Index in dollars/tonne, show close for the previous trading day         
($1 = 6.2076 Chinese yuan renminbi)

 (Reporting by Ruby Lian and David Stanway; Editing  by Alan

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