Chinese iron ore futures fell for a fourth consecutive session, down more than 7% to their lowest levels in nearly three weeks, on prospects of more imports of the steelmaking ingredient and as demand eased on the government’s decision to cut production.
“The government has a relatively strong determination to control steel output this year, which could affect demand for raw materials,” Li Wentao, an analyst with Tianfeng Futures, said.
Meanwhile, China’s imports of iron ore are seen to increase this month, leaving possibilities for an oversupply, Li added.
The most-traded iron ore futures on the Dalian Commodity Exchange DCIOcv1, for September delivery, plunged as much as 7.3% to 1,115 yuan ($172.51) per tonne, the lowest since July 2. They closed 5.3% lower at 1,138 yuan per tonne.
Spot prices of iron ore with 62% iron content for delivery to China declined $4 to $217.5 a tonne on Wednesday, data from SteelHome consultancy showed.
Dalian coking coal DJMcv1 inched up 0.02% to 2,085 yuan per tonne and coke futures DCJcv1 rose 0.1% to 2,738 yuan, both recovering from losses in the morning session.
Construction-used steel rebar SRBcv1, for October delivery, jumped 1.1% to 5,648 yuan a tonne.
Hot-rolled coils SHHCcv1, used in the manufacturing sector, dipped 0.3% to 5,947 yuan a tonne.
The August contract for stainless steel futures on the Shanghai bourse SHSScv1 ended up 0.1% to 18,575 yuan per tonne.