July 8, 2015 / 1:45 AM / 4 years ago

Dalian iron ore slumps 8 pct to record low as selloff extends

* Spot iron ore drops below $50/tonne to near decade-low

* Shanghai rebar fell nearly 5 pct to all-time low

By Manolo Serapio Jr

MANILA, July 8 (Reuters) - Chinese iron ore futures plunged nearly 8 percent to a record low on Wednesday as the selloff in China-traded commodities showed no sign of letting up amid a bearish view on the economy and following steep losses in equities.

It was the ninth straight day of decline for the Dalian futures which should put more downside pressure on benchmark spot prices that fell a further 4 percent on Tuesday to below $50 a tonne, near a decade-low reached in April.

“With both the Greek debt crisis and growing concerns regarding China’s growth outlook expected to dominate the trading landscape over the near term we expect spot iron ore prices to remain under substantial pressure heading into the third quarter,” said Sucden Financial analyst Kash Kamal.

The most-traded September iron ore contract on the Dalian Commodity Exchange was down 7.9 percent at the exchange-set floor of 349 yuan ($56) a tonne by 0133 GMT. That level - the lowest for a most-active contract since the bourse launched iron ore futures in 2013 - was first hit in overnight trading.

That could spill over into further weakness for the spot iron ore price which dropped 4.4 percent on Tuesday to $49.70 a tonne .IO62-CNI=SI, according to data compiled by The Steel Index. The spot benchmark is now within striking distance of a 10-year low of $46.70 reached on April 2.

The steelmaking raw material rallied as much as 40 percent from that April trough before sliding again, losing 24 percent from the June high of $65.40.

A fresh buildup in stockpiles of iron ore at China’s ports and sinking steel prices fueled the commodity’s return to a bear market. More supply courtesy of low-cost output pose more downside risk for prices going forward, analysts say.

“Key concerns are expanding low-cost supplies from Australia and Brazil, while demand slows from China,” ANZ analysts said in a note.

The most-active October rebar on the Shanghai Futures Exchanges was last down 2.6 percent at 1,939 yuan a tonne, after sliding as much as 4.8 percent to an all-time low of 1,896 yuan overnight. ($1 = 6.2097 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Ed Davies)

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