Chinese steel futures fall, weigh on iron ore as demand falters
Chinese steel futures on Friday posted their biggest daily loss in one month after gaining for three straight days as cooling winter demand dented prices and weighed on iron ore, the key steelmaking raw material.
Steel traders and end users are reluctant to restock on expectations that faltering demand in winter months would continue to dent prices.
“Steel traders are cautious at the moment and reluctant to start buying. They would consider restocking if physical prices fall further,” said Zhao Chaoyue, an analyst with Merchant Futures in Shenzhen.
“The government-imposed production curbs at steel mills seem less stricter than the beginning of the smog campaign in mid-November. Weak steel prices will continue pressuring iron ore,” Zhao added.
The most active rebar on the Shanghai Futures Exchange dropped 1.6 percent to 3,790 yuan ($585.60) a tonne on Friday, its biggest loss since Dec 13. It edged up 0.4 percent during the week.
Spot steel prices fell 0.3 percent to 4,275.9 yuan a tonne on Thursday, data on the website of Mysteel Consultancy showed.
Iron ore on the Dalian Commodity Exchange dropped 2.1 percent to 544 yuan a tonne. It ended the week 1.5 percent up.
Chinese iron ore imports fell 11 percent in December at 84.3 million tonnes from the previous month, but full-year shipments rose 5 percent to a record high of 1.075 billion tonnes from 2016, exceeding 1 billion tonnes for a second year, customs data showed on Friday. Coke slipped 0.7 percent to 2,011 yuan a tonne and coking coal fell 1.4 percent to 1,345.5 yuan a tonne, respectively.
Iron ore for delivery to China’s Qingdao port rose $0.77 to 79.08 a tonne on Thursday, according to Metal Bulletin.
Source: Reuters (Reporting by Ruby Lian and Josephine Mason; Editing by Vyas Mohan)