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China steel output curbs, weak demand drag iron ore
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Strong cyclone spares iron ore export hub in Australia
(Updates prices, adds latest capacity utilisation rate of blast
furnaces in China)
By Enrico Dela Cruz
April 14 (Reuters) - Iron ore futures wobbled on Friday,
on track for their second consecutive weekly fall amid mounting
concerns about demand for the steelmaking ingredient in top
steel producer China.
China's plan to cap domestic steelmakers' output at 2022
levels added to such concerns, dragging down prices already
pressured by lacklustre domestic steel demand during what is
supposedly the country's peak construction season, and a subdued
global economic outlook.
Bloomberg reported on Thursday the plan to limit China's
2023 steel output was expected to be released by the end of this
month.
The most-traded September iron ore on China's Dalian
Commodity Exchange ended daytime trade 0.8% lower at
768.50 yuan ($112.30) a tonne, and was on course for a weekly
fall of nearly 3%.
On the Singapore Exchange, benchmark May iron ore was down 0.4% at $115.90 a tonne, as of 0700 GMT. For the week
so far, it is more than 1%.
"Iron ore extended its losses as China plans to cap steel
production for 2023. This is in response to slower demand
recovery and to curb emissions," ANZ commodity strategists said
in a note.
Despite tepid demand though, the capacity utilisation
rate of blast furnaces operated by 247 Chinese steel mills under
Mysteel's weekly survey hit a 22-month high of 91.8% this week,
the consultancy and data provider said.
On the supply side, meanwhile, a category 5 storm that smashed into Australia's northwest coast largely spared populated regions including the world's largest iron ore export hub at Port Hedland. Dalian coking coal was virtually flat, while coke rose 1.1%. On the Shanghai Futures Exchange, rebar rose 0.4%, hot-rolled coil climbed 0.5%, and stainless steel gained 0.8%, while wire rod shed 0.8%. Rebar spot and futures prices in China hit the lowest since December earlier this week amid weak demand, analysts said. (Reporting by Enrico Dela Cruz in Manila; editing by Uttaresh Venkateshwaran and Jason Neely)
