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UPDATE 1-Blurry demand outlook drags China steel off three-week high

Published 20/06/2017, 05:15 pm
© Reuters.  UPDATE 1-Blurry demand outlook drags China steel off three-week high

* Rain limits construction activity in China -trader

* Dalian iron ore also slips (Updates prices)

By Manolo Serapio Jr

MANILA, June 20 (Reuters) - Chinese steel futures slipped on Tuesday after a four-day rise, reflecting concerns over slower demand in the world's top consumer as rains curb construction activity in many parts of the country.

"We're entering the rainy season which is expected to last for 1-1/2 months, so seasonal demand for steel would slow from now on," said a Shanghai-based trader, citing rains in China's eastern and southern areas.

The most-active rebar on the Shanghai Futures Exchange SRBcv1 closed 0.9 percent lower at 3,109 yuan ($455) a tonne. The construction steel product peaked at 3,185 yuan on Monday, its strongest since May 31.

Signs of some slowdown in China's property market may also weigh on steel demand, with the increase in home prices moderating in first- and second-tier cities in May, showing the impact of government measures to keep the market from overheating. steel prices weighed on raw material iron ore, with the most-traded iron ore on the Dalian Commodity Exchange DCIOcv1 easing 0.7 percent to 430.50 yuan a tonne.

"Iron ore supply is still high compared with demand," the trader said.

Stocks of imported iron ore at Chinese ports stood at 138.95 million tonnes on Friday, according to data tracked by SteelHome. The week before, the stockpiles reached 140.05 million tonnes, the highest ever on SteelHome's records that date back to 2004. SH-TOT-IRONINV

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB rose 1 percent to $56.30 a tonne on Monday, according to Metal Bulletin, in line with firmer futures in the previous session.

($1 = 6.8302 Chinese yuan)

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