Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

China iron ore extends losses as supply rises; steel rebounds

Published 08/05/2017, 01:19 pm
Updated 08/05/2017, 01:20 pm
© Reuters.  China iron ore extends losses as supply rises; steel rebounds

* China iron ore port stocks near 13-yr high hit in March

* Spot iron ore fell 10.3 pct last week, biggest loss in a year

By Manolo Serapio Jr

MANILA, May 8 (Reuters) - Iron ore futures in China slipped on Monday, extending last week's losses as supply at the country's ports rose, nearly matching the 13-year high reached in March, underlining the slow demand for the steelmaking raw material.

But a rebound in Chinese steel prices capped losses in iron ore, with other raw material coking coal steadying.

The most-traded iron ore on the Dalian Commodity Exchange DCIOcv1 was off 0.4 percent at 465.50 yuan ($67) a tonne by 0236 GMT. It declined 8.2 percent last week, its biggest such decline since late December.

The inventory of imported iron ore at 46 Chinese ports rose to 131.95 million tons on Friday, up 1.4 million tonnes from a week ago, according to SteelHome. The stockpiles hit 132.45 million tonnes in March, the most since SteelHome began tracking it in 2004. SH-TOT-IRONINV

Rising supply and the weakness in steel prices, spurred by worries over softer consumption, have dragged down iron ore, said Commonwealth Bank of Australia analyst Vivek Dhar.

"Chinese steel mills also refrained from buying iron ore on speculation that production cuts will be introduced later this week ahead of the One Belt One Road conference," said Dhar.

Leaders from 28 countries will gather in Beijing on May 14 to 15 for talks on what China formally calls the "One Road, One Belt" plan that envisions expanding trade and energy links between Asia, Africa and Europe underpinned by billions of dollars in infrastructure investment. typically orders industrial plants to cut or limit production to help clear the skies ahead of a major event such as when it hosted the G20 Summit in Hangzhou last year.

Iron ore prices may find support from a pickup in steel demand in China later in the year, said Dhar.

"Chinese steel demand is likely to remain supported as policy makers look to ensure stable economic growth ahead of elections later in the year. In particular, policy makers have targeted infrastructure investment," he said.

The most-active rebar on the Shanghai Futures Exchange SRBcv1 was up 1.7 percent at 2,982 yuan per tonne, after dropping 4.4 percent last week. Coking coal on Dalian exchange DJMcv1 was nearly flat at 1,032 yuan a tonne.

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB fell 5.3 percent to $61.73 a tonne on Friday, the lowest since October 2016, according to Metal Bulletin.

The spot benchmark lost 10.3 percent last week, the most since May last year.

($1 = 6.9039 Chinese yuan)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.