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China iron ore futures extend losses on higher shipments

Chinese iron ore futures fell for a third straight session on Wednesday, dragged lower by increasing seaborne arrivals at the country’s ports and higher shipments from big miners.

The most-traded iron ore futures contract on the Dalian Commodity Exchange, for January delivery, fell as much as 1.1% to 658 yuan ($92.80) per tonne in early trade.

Arrivals of the steelmaking raw material in China totalled 24.1 million tonnes in the week of Sept.9-15, up by 6.3 million tonnes from a week earlier, data compiled by Mysteel consultancy showed. Shipments from Australia and Brazil last week rose by 890,000 tonnes to 21.9 million tonnes.

Futures contract of the most-active construction steel rebar on the Shanghai Futures Exchange, for January delivery, was down 0.9% at 3,509 yuan a tonne, as of 0220 GMT, falling for a second session.

“Market will further evaluate the impact on steel products’ consumption and output from the coming National Day holiday,” Huatai Futures wrote in a note, adding that the underperformance of the newly launched iron ore futures contract based on new delivery rules also affected sentiment.

Earlier this week, China’s Dalian Commodity Exchange introduced a brand-based system for iron ore futures, with the first contract slated for delivery in September 2020 trading 3% lower in morning trade.

“Market will reevaluate the raw materials’ impacts on final products.” Huatai Futures said.

FUNDAMENTALS

* Benchmark 62% iron ore for delivery to China, as assessed by SteelHome consultancy, edged lower to $97 a tonne on Tuesday.

* Futures for hot-rolled coil steel, used in cars and home appliances, for January delivery on the Shanghai Futures Exchange, dropped 0.6% to 3,520 yuan a tonne.

* Other steelmaking ingredients were mixed, with Dalian coking coal down 0.9% at 1,338 yuan a tonne, while coke futures edged up 0.4% at 1,988 yuan.

* China’s Dalian Exchange brought in brands deliverable for iron ore futures slated for delivery September 2020 onwards after some low quality shipments in the past.

* U.S. President Donald Trump said on Tuesday his administration could seal a deal on trade with China before the U.S. presidential election, or an agreement could be reached the day after U.S. voters go to the polls.

Source: Reuters (Reporting by Min Zhang and Tom Daly; Editing by Aditya Soni)

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