Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Iron ore heads for fifth weekly fall in six, open interest in futures at record

Published 09/06/2017, 12:21 pm
Updated 09/06/2017, 12:30 pm
© Reuters.  Iron ore heads for fifth weekly fall in six, open interest in futures at record

* Open interest in Dalian iron ore futures hit 2.7 mln lots

* Fears of oversupply counter strong China imports - ANZ

* Shanghai rebar on track for second weekly fall

By Manolo Serapio Jr

MANILA, June 9 (Reuters) - Spot iron ore prices were headed for a fifth weekly fall in six after swooping to their lowest in almost a year, underlining concerns over rising supply in top buyer China.

China's imports of the steelmaking raw material climbed 5.5 percent in May from a six-month low in April. While some analysts say that reflected firm Chinese demand, that would also add to a rising mountain of stocks at Chinese ports as steel demand slows during the summer lull. of oversupply negated the strong rise in China's imports," ANZ analysts said in a note.

Open interest - or open contracts - in Chinese iron ore futures surged to a record on Thursday as prices fell further.

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slipped 0.1 percent to $55.36 a tonne on Thursday, the lowest since July 2016, according to Metal Bulletin. The spot benchmark, which touched $94.86 in February, has lost more than 4 percent for the week so far.

On Friday, the most-traded iron ore on the Dalian Commodity Exchange DCIOcv1 was down 1.5 percent at 423 yuan ($62) a tonne by 0201 GMT. It was also down for a fifth week in six.

Open interest in Dalian iron ore futures reached an all- time high of 2.7 million lots on Thursday when the most-active contract fell 2 percent.

Open interest in Chinese futures had been rising as prices retreated, and traders and analysts were looking at further price declines as memories fade of the commodity's stunning recovery in 2016. supply just keeps coming to Chinese ports and you see the inventory level rising," said Wang Di, an analyst at CRU consultancy in Beijing. But she added that "while inventory at ports is very high, inventory at mills is relatively low."

Stockpiles of the raw material at China's ports stood at 136.55 million tonnes last week, near the highest level since 2004, according to data tracked by SteelHome.

The most-active rebar on the Shanghai Futures Exchange SRBcv1 rose 0.8 percent to 2,995 yuan a tonne, but on track for a second weekly drop.

($1 = 6.8015 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.