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Iron ore sinks with steel in China, more supplies seen weighing on ore

Published 07/09/2016, 12:51 pm
Updated 07/09/2016, 01:00 pm
© Reuters.  Iron ore sinks with steel in China, more supplies seen weighing on ore

* Iron ore shipments from Port Hedland to China up 9 pct in Aug

* Shanghai rebar falls to lowest since late July

By Manolo Serapio Jr

MANILA, Sept 7 (Reuters) - Chinese iron ore futures fell 2 percent on Wednesday as steel prices touched six-week lows after recent gains, with expectations of additional supply this year seen weighing on the steelmaking commodity.

"We remain bearish on the ferrous metals market," Hui Heng Tan, analyst at Marex Spectron said in a note.

"With the continuing headwinds faced by demand, macroeconomic conditions and the anticipated additional supplies in the coming months, it does not bode well for iron (ore) prices."

Iron ore shipments to China from Port Hedland terminal in top exporter Australia rose to 35.44 million tonnes in August from 32.5 million tonnes in July. from Port Hedland are likely to rise in coming months as the new Roy Hill mine developed by Australian billionairfe Gina Rinehart's Hancock Prospecting ramps up to full capacity of around 55 million tonnes by year end.

Iron ore for January delivery on the Dalian Commodity Exchange DCIOcv1 was down 2 percent at 414.50 yuan ($62) a tonne by 0235 GMT.

On the Shanghai Futures Exchange, construction-used rebar SRBcv1 was down 3 percent at 2,357 yuan per tonne after falling as far as 2,340 yuan, its weakest since July 27.

Some traders remain hopeful that steel prices in China, the world's top consumer, will strengthen this month and next during a a seasonally brisk period for demand.

"September and October are peak seasons for steel demand and port stocks (of iron ore) are dropping so mills will be restocking," said a Shanghai-based trader.

Inventory of imported iron ore at Chinese ports dropped for a fifth week in a row to 103.8 million tonnes on Sept. 2, according to SteelHome consultancy. SH-TOT-IRONINV

Iron ore for delivery to China's Tianjin port .IO62-CNI=SI was little changed at $58.60 a tonne on Tuesday, according to The Steel Index. The spot benchmark has gained 37 percent this year.

($1 = 6.6712 Chinese yuan)

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