✂ Fed’s first rate cut since 2020: Use our free Stock Screener to find new opportunities fastExplore for FREE

Shanghai steel slips after five-day spike on wobbly outlook

Published 03/05/2017, 12:43 pm
Updated 03/05/2017, 12:50 pm
© Reuters.  Shanghai steel slips after five-day spike on wobbly outlook

* Dalian iron ore falls more than 1 pct, off from one-month top

* Iron ore port stocks in China back near highest level since 2004

* Coking coal, coke futures also slide

By Manolo Serapio Jr

MANILA, May 3 (Reuters) - Chinese steel futures dropped on Wednesday, snapping a five-day winning streak and dragging down raw material iron ore, amid a still shaky outlook for demand in the world's top consumer.

The decline pulled back both commodities from a near one-month high hit in the previous session.

The most-active rebar on the Shanghai Futures Exchange SRBcv1 was down 0.9 percent at 3,104 yuan ($450) a tonne, as of 0239 GMT. The construction steel product hit 3,160 yuan on Tuesday, its strongest since April 6.

Rebar fell for a second straight month in April as pickup in demand was slower than expected, traders said. While construction demand remained firm as Chinese stockpiles steadily dropped, the growth in supply appeared stronger.

China's crude steel production reached a record 72 million tonnes in March. As of April 28, rebar stocks held by Chinese traders stood at 5.42 million tonnes, the lowest since January, according to data compiled by SteelHome. SH-TOT-RBARINV

Iron ore on the Dalian Commodity Exchange DCIOcv1 slipped 1.2 percent to 524.50 yuan per tonne. In the previous session, it touched 539 yuan, its highest since April 7.

The sharp swings in iron ore prices have caused buying interest in China to slow down, said a Shanghai-based trader.

"Mills' opinion towards buying keeps changing. Weeks ago, when the price was high they tend to buy cargo. Now that the price is dropping again, some mills are holding back, thinking it will fall further," he said.

There is more interest in iron ore stocks sold at Chinese ports that tend to be cheaper than fresh seaborne cargoes, the trader said.

Inventory of imported iron ore at China's major ports reached 130.55 million tonnes as of Friday, up 950,000 tonnes from the previous week, SteelHome said. The stockpiles SH-TOT-IRONINV hit 132.45 million tonnes in March, the most since SteelHome began tracking it in 2004.

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB was little changed at $68.72 a tonne on Tuesday, according to Metal Bulletin.

The spot benchmark, which touched a 30-month peak of $94.86 in February, has dropped 13 percent this year.

The fall in steel futures also weighed on coal used in steelmaking. Dalian coking coal DJMcv1 slipped 2.7 percent to 1,104 yuan a tonne, and coke DCJcv1 slid 3.6 percent to 1,574 yuan.

($1 = 6.8929 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.