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Higher shipments also weigh on iron ore futures
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Chinese steel mills lower coke purchasing prices
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Coke and coking coal tumble on weak spot market
(Updates prices and adds bullets)
BEIJING, April 4 (Reuters) - Dalian and Singapore iron
ore futures fell for a second session on Tuesday, pressured by
higher shipments, weak steel demand in the traditionally peak
construction season and lingering concerns about government
intervention.
"The current apparent (steel) demand is weaker than
expected, putting downward pressure on the raw materials
market," said a Tianjin-based iron ore analyst.
Market talks that China's National Development and Reform
Commission met with several futures companies in Beijing on
Monday to discuss the iron ore market, have raised fears of more
government action against hoarding and speculative activities,
said analysts.
The most-traded May iron ore futures contract on the Dalian
Commodity Exchange (DCE) ended daytime trading 2.06%
lower at 881.5 yuan ($128.10) a tonne, the lowest since March
28.
On the Singapore Exchange, the benchmark May iron ore was down 2.11% at $118.25 a tonne, as of 0700 GMT,
after hitting a one-week low of $117.05.
Markets in China will be closed on Wednesday for a holiday.
Other steelmaking raw materials coking coal and coke fell sharply, dragged down by abundant supply and weak demand. Coking coal slumped 3.51% and coke lost 4.21%. Some mills in northern China's Hebei, Shanxi and Shandong provinces successfully lowered their coke purchase prices by 50-100 yuan a tonne, information from Mysteel consultancy showed. "Spot prices slumped due to supply outpacing demand at the moment, putting pressure on the futures market as well. We expect the second round of proposal for (coke) price drop to be on the way," said a Shanghai-based coking coal and coke analyst. Prices of steel futures were also weaker. Rebar on the Shanghai Futures Exchange (ShFE) declined by 2.19% to 4,018 yuan a tonne, hot-rolled coil shed 2.29%, wire rod dropped 0.24% and stainless steel dipped 0.95%. Despite the current ferrous market weakness, some analysts expect steel demand to gradually pick up in April following the latest round of inclement weather that has hit many regions across China and affected construction activities.
($1 = 6.8815 Chinese yuan) (Reporting by Amy Lv and Dominique Patton; Editing by Subhranshu Sahu)
