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UPDATE 1-China iron ore drops for 3rd day as demand slips in buyers' market

Published 06/07/2017, 05:20 pm
Updated 06/07/2017, 05:30 pm
© Reuters.  UPDATE 1-China iron ore drops for 3rd day as demand slips in buyers' market

* Shanghai rebar retreats from 3-1/2-year high

* Stocks of iron ore at China ports near 13-year peak (Updates prices)

By Manolo Serapio Jr and Muyu Xu

MANILA/BEIJING, July 6 (Reuters) - Chinese iron ore futures fell for a third straight day on Thursday amid a persistent glut of the steelmaking raw material that has similarly pressured spot prices.

Demand remains plentiful in China, with stocks of iron ore at the country's ports staying near the highest level in at least 13 years and imports kept rising.

"This is a buyers' market and I won't be surprised to see prices pull back further," said a Shanghai-based iron ore trader.

Underlining surplus supply, some Australian and Brazilian suppliers are offering discounts for their iron ore cargoes, he said.

"It's difficult for iron ore to maintain any upward trend because people have a lot of choices when it comes to seaborne cargoes," he said.

The most-traded iron ore on the Dalian Commodity Exchange DCIOcv1 closed down 0.3 percent at 471 yuan ($69) a tonne, but off the session's low of 457 yuan.

Iron ore for delivery to China .IO62-CNO=MB stood at $63.28 a tonne on Wednesday, down 2.6 percent from last month's peak, according to Metal Bulletin. The spot benchmark has averaged at about $74 this year, after touching a 30-month peak of $94.86 in February.

Stocks of imported iron ore at China's ports reached 140.3 million tonnes last week, not far below the previous week's 141.45 million tonnes, which was the highest since 2004, according to data tracked by SteelHome. SH-TOT-IRONINV

"Iron ore prices are under pressure due to surplus supply," said a trader in Beijing, adding that the pullback in prices of steel billet also weighed on the raw material.

On the Shanghai Futures Exchange, the most-active rebar SRBcv1 slipped 0.2 percent to 3,417 yuan per tonne.

The construction steel product touched 3,474 yuan on Wednesday, its strongest since January 2014, on worries over

tighter supply after Beijing shut some low-quality steel plants to cut pollution and a production capacity glut.

The world's largest steel producer closed more than 600 steel mills producing low-grade construction steel during the first half of the year, shuttering about 120 million tonnes of capacity. ($1 = 6.8017 Chinese yuan)

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