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Shanghai steel futures slip on weak demand, iron ore little changed

Published 19/07/2019, 12:32 pm
© Reuters.  Shanghai steel futures slip on weak demand, iron ore little changed
BADI
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* Construction steel rebar heads for 3rd weekly fall

* Dalian iron ore moving in tight range

By Enrico Dela Cruz

MANILA, July 19 (Reuters) - Steel futures in China fell in early trade on Friday, with construction material rebar extending losses into a third session and heading for its third straight week of losses, pressured by slowing demand.

Iron ore prices remained range-bound, with demand for the steelmaking input also turning weak amid signs that stocks at ports in China are set to rise in the second half of the year, which could help ease concerns about tight supply.

Overall short-term macroeconomic conditions in China remain "bearish", said commodities broker Marex Spectron.

"We continue to pick up weakness in manufacturing and construction activity, which should mean steel demand will come under pressure," said Marex analyst Hui Heng Tan in Singapore. "We are bearish on current demand conditions (for iron ore)."

FUNDAMENTALS

* The most-actively traded October rebar contract on the Shanghai Futures Exchange SRBcv1 fell as much as 1.8% to 3,942 yuan ($573.39) a tonne, and was down 1.2% as of 0153 GMT.

* Hot rolled steel SHHCcv1 used in cars and home appliances edged down 0.9% to 3,863 yuan a tonne.

* The most-actively traded September iron ore contract on the Dalian Commodity Exchange DCIOcv1 was up 0.1% at 896 yuan a tonne.

* The Dalian iron ore benchmark has more than doubled this year, amid supply outages in top exporters Australia and Brazil, and robust demand in China - the world's top steel producer and consumer.

* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 was down 1.2% at $121.50 a tonne on Thursday, but still hovering near the five-and-a-half-year high of $126.50 hit on July 3, data tracked by SteelHome consultancy showed.

* The Baltic index .BADI , which tracks rates for ships ferrying dry bulk commodities, on Thursday rose 3.2%, or 66 points, to 2,130, its highest since mid-December, 2013. The Baltic index extended gains for an eighth straight session, mainly driven by strong demand for vessels that ship iron ore from Brazil into China.

* Other steelmaking ingredients were trading lower, with coking coal DJMcv1 down 0.9% at 1,401 yuan a tonne, while coke DCJcv1 slipped 1.5% to 2,164.5 yuan.

* For the top stories metals and other news, click TOP/MTL or MET/L

MARKETS NEWS

* Asian stocks gained and the dollar sagged on Friday after a top Federal Reserve official all but cemented expectations of a U.S. interest rate cut later this month. MKTS/GLOB

($1 = 6.8749 yuan)

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