China iron ore futures plunge over 7per cent, give up half-year gains
FILE PHOTO: Workers pour molten iron into a mould at a workshop in Hangzhou, Jiangsu province, China July 24, 2019. REUTERS/Stringer
BEIJING : Benchmark iron ore futures in China extended losses to the third consecutive session, diving more than 7per cent and sending the price to its lowest since Feb. 5, dented by gloomy demand and increasing supply outlook.
China's steel consumption is expected to soften in the second half, especially in the construction sector, due to tightening property policy, steel association and analysts said.
"The logic is, the weaker demand is, the stricter steel production curbs will be," analysts with CITIC Securities wrote in a note.
"Under the assumption of cooling demand, increase in steel prices will be limited... but pressure on iron ore is significant," said the note.
Meanwhile, iron ore supplies are also expected to gain from domestic miners, Brazil, and other non-mainstream countries, according to Li Wentao, analyst with Tianfeng Futures.
The most traded iron ore futures on the Dalian Commodity Exchange, for January delivery, plunged 7.4per cent to 761 yuan (US$117.20) per tonne, as of 0320 GMT.
Spot prices of iron ore with 62per cent iron content for delivery to China fell US$3.5 to US$158.5 a tonne on Wednesday, data from SteelHome consultancy showed.
Steel prices on the Shanghai Futures Exchange also tumbled.
Construction used rebar slumped 4.1per cent to 5,004 yuan a tonne.
Hot rolled coils, used in the manufacturing sector, fell 2.8per cent to 5,394 yuan per tonne.
Stainless steel futures on the Shanghai bourse, for September delivery, declined 3.3per cent to 17,680 yuan a tonne.
FUNDAMENTALS
* Dalian coking coal futures jumped 2.1per cent to 2,265 yuan per tonne.
* Coke futures slipped 1.4per cent to 2,852 yuan a tonne.
* Swedish green steel venture HYBRIT had made the world's first customer delivery of steel produced without using coal as it looks to revolutionize an industry that accounts for around 8per cent of global greenhouse gas emissions.
(US$1 = 6.4929 Chinese yuan)
(Reporting by Min Zhang; Editing by Krishna Chandra Eluri)
