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Band Enrico Dela Cruz
August 12 (Reuters) – Iron ore futures fell on Thursday, with the Dalian benchmark hovering around a more than four-month low hit earlier this week amid concerns over steel production controls in China and signs of an economic slowdown from the world’s largest consumer of metals.
The most traded iron ore on China’s Dalian Commodity Exchange DCIOcv1 ended day trading down 2.2% to 838 yuan ($ 129.36) a ton, erasing gains made in the previous session.
The most active September contract for the steel ingredient on the Singapore Stock Exchange SZZFU1 lost up to 3% at $ 158.90 a tonne.
China, which accounts for more than half of global steel production, seeks to limit its annual production to a maximum volume of 2020 in order to reduce emission levels, but restrictions on steel plants should be extended beyond year.
Authorities in Tangshan City, the hub of steel production in Hebei Province, released an air quality control plan for the Beijing Winter Olympics in February, imposing ultra-low emission standards in the steel and power sectors through March.
“The continued tightening of Hebei’s production limit means the country’s crude steel production will drop more than expected,” Sinosteel Futures analysts said in a note.
As restrictions on steel production have started since July and signs of slowing Chinese economic activity have emerged, spot iron ore prices have also hit a more than four-month low this week, at less than $ 170 a tonne, SteelHome advice data showed. SH-CCN-IRNOR62
Stainless steel futures were the only winner in China’s ferrous metals complex, with the most traded September contract rising 1.4%, supported by strong demand and as prices of the key raw material nickel jumped amid supply concerns.
Structural steel rebar on the Shanghai Futures Exchange SRBcv1 fell 2.1%, while the hot rolled coil SHHCcv1 fell 2%.
dalian coking coal DJMcv1 fell 1.5% but coke DCJcv1 finished flat.
Steel production in Chinahttps://tmsnrt.rs/3loJ6MK
(Reporting by Enrico Dela Cruz in Manila; Editing by Rashmi Aich)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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