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UPDATE 1-China iron ore, steel extend falls to third day, but losses smaller

Published 19/04/2017, 05:50 pm
© Reuters.  UPDATE 1-China iron ore, steel extend falls to third day, but losses smaller

* Shanghai rebar, Dalian iron ore down less than 1 pct

* Coking coal drops 3.1 pct, coke falls 5.3 pct

* Spot iron ore fell 4.6 pct on Tuesday, down 20 pct this year (Updates prices)

By Manolo Serapio Jr

MANILA, April 19 (Reuters) - Chinese iron ore futures edged lower on Wednesday, extending losses for a third day along with steel prices amid concerns that supply was outpacing demand in the world's top steel producer and consumer.

But the declines for steel and iron ore were smaller than in recent sessions even as both commodities touched or neared multi-month lows. Coking coal dropped 3 percent after lagging earlier losses in steel and iron ore.

"It's still because of sufficient supply and relatively slow demand," said Richard Lu from CRU Consultancy in Beijing, on the sustained drop in steel prices.

"Prices are converging to what's justified by supply-demand fundamentals. Market sentiment is very bearish."

The most-traded iron ore on the Dalian Commodity Exchange DCIOcv1 closed down 0.4 percent at 480 yuan ($70) a tonne. The contract fell as far as 467 yuan, near Tuesday's three-month low, when it tumbled 6.5 percent.

On the Shanghai Futures Exchange, the most-active rebar SRBcv1 slipped 0.6 percent to end at 2,852 yuan per tonne, off a 10-week low of 2,811 yuan reached earlier in the session. The construction steel product fell 3.7 percent on Tuesday.

China's crude steel output reached a record 72 million tonnes in March as mills ramped up output in anticipation of a pickup in demand that has remained slow, government data released on Monday showed. steel demand has curbed appetite for iron ore with spot prices extending their descent.

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB fell 4.6 percent to $63.20 a tonne on Tuesday, the lowest since October 2016, according to Metal Bulletin.

The spot benchmark has lost nearly 20 percent this year after an 81-percent rally in 2016.

Coal used in steelmaking fell more deeply on Wednesday after having lagged the declines in steel and iron ore futures. Dalian coking coal DJMcv1 closed down 3.1 percent at 1,078 yuan a tonne, and coke DCJcv1 slid 5.3 percent to 1,546 yuan. ($1 = 6.8837 Chinese yuan)

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