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Dalian iron ore climbs more than 2%
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SGX iron ore rises back to $120/T
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Shanghai rebar snaps eight-session slump
(Updates prices)
By Enrico Dela Cruz
March 27 (Reuters) - Dalian and Singapore iron ore
futures rebounded on Monday from oversold levels, although
traders' disappointment particularly over tepid demand for
construction steel products in China capped gains.
Benchmark prices of the steelmaking ingredient slumped last
week, hitting the lowest levels in more than five weeks on
China's Dalian Commodity Exchange and falling below $120 a tonne
on the Singapore Exchange.
Along with the dismay over a fall in demand for construction
steel products during what is normally a peak season, sentiment
was also dampened by news that top steel producer China was
considering cutting its annual crude steel output by about 2.5%
this year in line with its policy to curb emissions.
Traders were also mindful of Chinese regulators' frequent
warnings against excessive market speculation and iron ore
hoarding, as prices had rallied dramatically from October lows
on expectations of strong demand from a recovering Chinese
economy.
Such "a perfect storm of bearish factors" had dragged down
prices, and iron ore "now looks and feels heavily oversold",
Navigate Commodities managing director Atilla Widnell said.
The most-traded May iron ore on the Dalian exchange ended daytime trade 2.2% higher at 873.50 yuan
($127.00) a tonne, after falling for seven straight sessions.
On the Singapore Exchange, iron ore's benchmark April contract was up 0.4% at $120.15 a tonne, as of 0710 GMT. Technical support was seen at around the $117-$119 a tonne levels, Widnell said. Other Dalian steelmaking inputs were also firmer, with coking coal and coke up 0.5% and 0.9%, respectively.
Rebar on the Shanghai Futures Exchange climbed 0.5% following an eight-session selloff, while hot-rolled coil was flat, wire rod climbed 3%, but stainless steel slipped 0.4%.
Widnell said the Chinese Ministry of Industry and
Information Technology's prohibition of new steel capacity
additions and enforcement of capacity replacement programmes
should lend support to rebar prices.
(Reporting by Enrico Dela Cruz in Manila; Editing by Sherry
Jacob-Phillips)
