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China iron ore futures plunge to over 9-month low on falling steel output

Iron ore futures in China hit a nine-month low on Wednesday as steel output in the top producer continued to slide, compounding concerns around demand for the raw material.

China’s monthly crude steel production slipped for the third straight month to 83.24 million tonnes in August, data from the National Bureau of Statistics showed, sending average daily output to the lowest since March 2020.

The most-traded iron ore futures on the Dalian Commodity Exchange, for January delivery, fell as much as 4.3% to 683 yuan ($106.02) per tonne, the lowest since Dec. 9, 2020. The contract was down 2.9% to 693 yuan at the close.

Spot prices of iron ore with 62% iron content for delivery to China fell $2 to $125 a tonne on Tuesday, according to SteelHome consultancy.

Prices for other steelmaking ingredients were mixed.

Dalian coking coal futuresinched 0.3% higher to 2,744 yuan a tonne, while coke DCJcv1 slipped 0.2% to 3,373 yuan per tonne.

China’s August coke output stood at 39.67 million tonnes, down 5% from the same month a year earlier.

“Global commodity prices are still at high levels, and there’s still uncertainty in future trends despite recent drops,” a spokesperson from the statistics bureau said at a briefing on Wednesday.

Construction used steel rebar on the Shanghai Futures Exchange fell 1.4% to 5,518 yuan a tonne.

Hot rolled coils ended down 1.2% at 5,694 yuan per tonne.

Stainless steel futures on the bourse, however, jumped 4.5% to 19,815 yuan a tonne.

The country’s property investment in August rose 0.3% from a year ago, the slowest pace in 18 months, while fixed-asset investment grew 8.9% on an annual basis in the first eight months of the year, according to the statistics bureau.
Source: Reuters (Reporting by Min Zhang and Shivani Singh; Editing by Devika Syamnath and Shounak Dasgupta)

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