By Enrico Dela Cruz
Feb 13 (Reuters) - China's ferrous futures fell on
Monday, pressured by mounting domestic steel stocks and rising
portside iron ore inventory, indicating a slow recovery in
demand even as the latest indicators point to a rebounding
economy.
The most-traded May iron ore on China's Dalian Commodity
Exchange ended morning trade 0.7% lower at 854.50 yuan
($125.07) a tonne.
On the Singapore Exchange, the steelmaking ingredient's
benchmark March contract was down 2.2% at $124.72 a
tonne, as of 0431 GMT.
On the Shanghai Futures Exchange, rebar shed 0.8%,
while other steel benchmarks also dropped. Hot-rolled coil dipped 0.6%, wire rod lost 0.8%, and
stainless steel slipped 0.5%.
"Industrial metals markets will need to wait for February
and March economic data to get a true sense on health of the
Chinese economy," Navigate Commodities Managing Director Atilla
Widnell said.
Traders were cautious despite data showing new bank loans in
China jumped more than expected to a record 4.9 trillion yuan
($717.21 billion) in January, while new home sales in 16 Chinese
cities rose for the second straight week. "The profits of steel mills have not improved," Huatai
Futures analysts said in a note. "The continuous increase in
inventory will cause short-term adjustments in finished product
prices."
Steel inventories held by Chinese traders, which have been
steadily rising since late December, increased further by 1.5
million tonnes over Feb. 3-9, according to Mysteel consultancy's
latest stocks survey.
Meanwhile, portside iron ore inventory climbed last week to
138.5 million tonnes, the highest since mid-September, SteelHome
consultancy data showed. Other Dalian steelmaking inputs were also weaker, with
coking coal down 2.2% and coke dropped 2.4%.
"Higher-frequency construction steel trading volumes alluded
to emerging shoots of a fragile recovery in steel demand last
week," Widnell said.
"If this trend extends for a second consecutive week, this
could also reignite the optimism around the reopening
narrative."
(Reporting by Enrico Dela Cruz in Manila; editing by
Uttaresh.V)
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