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UPDATE 1-Shanghai hot-rolled coil tumbles as coronavirus hits demand

Published 01/04/2020, 06:58 pm
Updated 01/04/2020, 07:00 pm

* Shanghai HRC futures drop most in 3-1/2 months

* Dalian iron ore down as much as 2.9%

* Coronavirus hit downstream demand and exports for HRC - analyst (Recasts; Updates with closing prices)

BEIJING, April 1 (Reuters) - Hot-rolled coil (HRC) futures in China plunged on Wednesday, hitting their lowest in over 3-1/2 months, as the coronavirus pandemic dents demand amid an already slowing global economy.

The most active May contract of hot-rolled coil on the Shanghai Futures Exchange SHHCcv1 closed down 2.3% at 3,186 yuan ($449.03) a tonne, the lowest since Nov.13.

"Downstream demand for HRC, mainly from manufacturing sectors such as autos and home appliances, are not good," said Zhao Yu, an analyst with Huatai Futures, adding that the spreading virus outside China since late March also affected HRC exports.

Major automakers halted production at plants in North America as corporations grapple with growing signs of coronavirus damage. of China's steel products slumped 27% in the Jan-Feb period.

Meanwhile, iron ore futures on the Dalian Commodity Exchange DCIOcv1 also tumbled on Wednesday, slumping as much as 2.9%, despite Brazilian miner Vale saying that the resumption of its lost production capacity could be postponed due to the coronavirus. Securities expected iron ore demand in Japan, South Korea and Europe could drop by 20 million tonnes in the second quarter.

"Global iron ore will shift to oversupply from shortage in the second quarter and prices face downward risks," the broker wrote in a note.

The most-traded iron ore contract ended down 1.7% to 639 yuan per tonne.

Spot prices of benchmark iron ore with 62% iron content stood at $84.5 per tonne on Tuesday, unchanged from the previous session. SH-CCN-IRNOR62

FUNDAMENTALS

* Shanghai construction rebar SRBcv1 , for May delivery, extended losses into a third session, down 1.6% at 3,352 yuan per tonne.

* Stainless steel futures SHSScv1 , for June delivery, edged up 0.1% to 11,985 yuan per tonne.

* Dalian coking coal DJMcv1 dropped 0.9% to 1,244 yuan per tonne and Dalian Coke DCJcv1 fell 2.1% to 1,731 yuan per tonne.

* Canadian miner Teck Resources Ltd said it expected steelmaking coal production to fall to about 80-85% of normal levels in an initial two-week slowdown from Mar. 25. China's factory activity improved in March after plunging a month earlier, a private survey showed on Wednesday, but the bare minimal growth highlighted the intense pressure facing businesses as the global coronavirus pandemic shuts down many countries. More than 850,000 people have been infected by the coronavirus across the world and more than 40,000 have died. For top stories on metals and other news, click TOP/MTL or MET/L .

($1 = 7.0953 Chinese yuan renminbi)

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