💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Dalian iron ore drops 4th day as record China imports highlight glut

Published 13/01/2016, 03:10 pm
© Reuters.  Dalian iron ore drops 4th day as record China imports highlight glut

* China iron ore imports at 96.3 mln T in December

* Shanghai rebar hits two-week low

By Manolo Serapio Jr

MANILA, Jan 13 (Reuters) - Chinese iron ore futures dropped for a fourth session in a row on Wednesday, reflecting concerns over weak demand and excess supply as shipments to China reached a record high in December.

China, the world's top buyer of iron ore, imported 96.27 million tonnes of the steel making commodity last month, customs data showed. That brought 2015 purchases to 952.72 million tonnes, also an all-time high. iron ore imports are usually strong in December as major suppliers Australia and Brazil try to meet their annual shipment targets, said Wang Di, analyst at CRU Group in Beijing.

"I don't think it's a sign of demand recovering, we haven't seen signs of improvement in steel demand. For this year, we expect to see a continued increase in supply from major miners," said Wang.

The most-traded May iron ore on the Dalian Commodity Exchange DCIOcv1 was down 1 percent at 300 yuan ($46) a tonne by midday.

Underlining slow demand for iron ore among Chinese steel producers, stocks of the imported material at the country's ports stood at 93 million tonnes last week, near a seven-month high. SH-TOT-IRONINV

Shrinking Chinese demand and tighter environmental measures are likely to push more steel mills to cut production or be shut for good, traders and analysts say, deepening a glut in iron ore as miners continue to boost output.

Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI dropped 2.2 percent to $40 a tonne on Tuesday, according to The Steel Index (TSI), the lowest since Dec. 21.

The bulk commodity resumed its downturn shortly after 2016 began, having rallied to $43.10 a tonne recently on the back of some stabilisation in Chinese steel prices.

ANZ Bank said the renewed weakness in the steel market "leaves iron ore prices exposed to further falls."

Iron ore fell to $37 on Dec. 11, the lowest level recorded by TSI which began compiling data in 2008.

Construction-used rebar was down 0.6 percent at 1,739 yuan a tonne on the Shanghai Futures Exchange SRBcv1 , having touched a two-week trough of 1,735 yuan earlier.

Amid weak demand at home, China's steel exports surged to a record 112.4 million tonnes last year. Exports last month jumped 10.9 percent from November to 10.66 million tonnes. and iron ore prices at 0347 GMT

Contract

Last

Change Pct Change SHFE REBAR MAY6

1739

-11.00

-0.63 DALIAN IRON ORE DCE DCIO MAY6

300

-3.00

-0.99 SGX IRON ORE FUTURES FEB

37.07

+0.27

+0.73 THE STEEL INDEX 62 PCT INDEX

40

-0.90

-2.20 METAL BULLETIN INDEX

41.19

-0.12

-0.29

Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.5772 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.