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REFILE-UPDATE 1-China iron ore pulls back from record peak as supply concerns ease

Published 18/07/2019, 07:47 pm
© Reuters.  REFILE-UPDATE 1-China iron ore pulls back from record peak as supply concerns ease
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* Dalian iron ore wobbles as demand seen intact

* Coking coal steady despite coal import restrictions

* Two Chinese ports halt customs clearances for coal imports

By Enrico Dela Cruz

MANILA, July 18 (Reuters) - China's iron ore futures edged lower in Thursday's wobbly trade, with market participants reassessing the supply outlook amid indications of a rebound in shipments of the steelmaking raw material from top exporters Australia and Brazil.

The most-actively traded September iron ore contract on the Dalian Commodity Exchange (DCE) DCIOcv1 ended down 0.6% at 889 yuan ($129.20) a tonne, after climbing 1.3% earlier in the session.

"Demand is pretty good, but on the supply side there's a little bit of change in the momentum," said Helen Lau, mining and metals analyst at Argonaut Securities in Hong Kong.

The market seems to have taken a pause, she said, following the sustained rally this year that had pushed the Dalian iron ore to a record high of 924.50 yuan a tonne on Tuesday.

After Tuesday's rally, the DCE announced an increase in transaction fees for Dalian iron ore trades, effective July 18, which may curb trading activity and, thus, volatility in prices, some analysts said. fee hike comes after the Chinese government vowed to keep "order" in the market at a meeting last week with top steel mills, domestic trading houses, industrial associations and the DCE, according to a source who attended the meeting. Dalian iron ore benchmark has more than doubled this year, amid supply outages from Australia and Brazil, and robust demand in China - the world's top steel producer and consumer.

Iron ore shipments to China from Australia's Port Hedland terminal rose more than 11% in June from a month earlier, port data released on Wednesday showed. Baltic Exchange's main sea freight index .BADI , which tracks rates for ships ferrying dry bulk commodities, rose on Wednesday, extending gains for a seventh straight session amid strong demand for vessels that ship iron ore from Brazil. Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 steadied at $123 a tonne on Wednesday, near the five-and-a-half-year high of $126.50 hit on July 3, data tracked by SteelHome consultancy showed.

* BHP Group Ltd BHP.AX , the world's biggest miner, on Tuesday reported a rebound in iron ore output in the fourth quarter after a cyclone hit production in March, and forecast modest output growth in 2019/20 amid a surge in prices. The most-active October construction steel rebar contract on the Shanghai Futures Exchange SRBcv1 fell 1.7% to 3,968 yuan a tonne. Hot rolled steel SHHCcv1 used in cars and home appliances dropped 1.2% to 3,861 yuan.

* Other steelmaking inputs were also little changed, with Dalian coking coal DJMcv1 almost flat at 1,415 yuan a tonne, while coke DCJcv1 edged up 0.2% to 2,194.50 yuan.

* Chinese customs is no longer permitting coal cargoes to enter the country at the ports of Jingtang and Caofeidian, said three coal traders, who were told by customs officials of the halt on Tuesday. For the top stories metals and other news, click TOP/MTL or MET/L ($1 = 6.8809 yuan)

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https://tmsnrt.rs/32qmsrs

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