China iron ore futures slump on rising supply, weak demand

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Dalian iron ore futures slumped to a two-month low on Monday, extending losses to an eighth session, amid worries of weak demand as China’s top steel-producing province of Hebei looks to tighten emission requirements.

The most-traded iron ore contract on the Dalian Commodity Exchange, for January 2020 delivery, dropped as much as 5.6% to 609.50 yuan ($86.31) per tonne, the lowest since June 11, and was down 5.3% at 611 yuan as of 0150 GMT.

The contract had closed down 3.8% on Friday, logging the biggest weekly drop in over 16 months.

China’s Hebei province, which surrounds the capital Beijing, has summoned the leaders of three cities after they failed to “meet public expectations” on controlling air pollution.

The province is set to impose tougher emission requirements on its industrial firms this year, according to the local environmental protection agency.

“All eyes will be on factory data out of China for any further signs of weakness amid the ongoing trade conflict with the U.S.,” ANZ Research said in a note.

China’s statistics bureau will release its July output data on Wednesday.

FUNDAMENTALS

* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 dipped 1.06% to $93.5 a tonne on Friday, based on data tracked by SteelHome consultancy. It was the lowest since April 26.

* The most-active construction steel rebar contract on the Shanghai Futures Exchange, with October 2019 expiry, was down 0.8% to 3,589 yuan a tonne.

* Hot-rolled steel, used in cars and home appliances, edged up 0.8% to 3,636 yuan per tonne.

* Other steelmaking materials were mixed, with Dalian coking coal up 0.6% at 1,420 yuan a tonne, while coke fell 0.2% to 1,972 yuan.

Reporting by Min Zhang and Tom Daly; editing by Uttaresh.V

Source:in.reuters.com/article/asia-ironore/china-iron-ore-futures-slump-on-rising-supply-weak-demand-idINL4N2580C2