Chinese iron ore futures ended down almost 5% at a nearly four-month low on Thursday, as domestic consumption remains sluggish on steel production controls.
The most active iron ore futures on the Dalian Commodity Exchange, for September delivery, plunged as much as 5.6% to 999 yuan ($154.54) per tonne during the session. They ended down 4.8% at 1,007 yuan, their lowest since April 12 .
“Domestic consumption (for iron ore) is weakening significantly… due to different perception of crude steel output cuts, iron ore prices have been fluctuated recently,” analysts with Huatai Futures wrote in a note.
Under the current strict implementations of steel production controls, high iron ore prices are not seen to be supported, it added.
Prices of spot 62% iron ore for delivery to China stood at $185.5 per tonne on Wednesday, according to SteelHome consultancy.
Other steelmaking ingredients on the Dalian bourse were up, with coking coal increasing 2.0% to 2,326 yuan a tonne and coke futures closing up 1.8% at 2,945 yuan per tonne.
FUNDAMENTALS
* Steel rebar on the Shanghai Futures Exchange, for October delivery, inched up 0.3% to 5,373 yuan per tonne.
* Hot rolled coils futures, used in cars and home appliances, dipped 0.1% to 5,733 yuan a tonne.
* The September contract for Shanghai stainless steel futures SHSScv1 slipped 0.8% to 18,785 yuan per tonne.
* China, the world’s biggest coal producer and consumer, will extend the trial operations of 15 mines with a combined annual production capacity of 43.5 million tonnes for another year to boost supply, the state planner said on Wednesday.
Source: Reuters