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Iron ore pressured by latest China warning
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Chinese economic stimulus could be reduced -analyst
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Little impact from output cuts by EAF steelmakers
(Updates prices and adds bullet points)
By Amy Lv and Dominique Patton
BEIJING, April 19 (Reuters) - Dalian and Singapore iron
ore futures fell on Wednesday, as another price warning from
China's state planner weighed on market sentiment.
China's National Development and Reform Commission said it
would monitor the iron ore market closely and take steps with
relevant departments to limit irrational price increases.
"We feel the government's tone as reflected by its wording
is more strict compared to those demonstrated in statements
released on its WeChat," said a Shanghai-based iron ore analyst
who requested anonymity because he is not authorised to speak to
the media.
The most-traded September iron ore on the Dalian Commodity
Exchange (DCE) ended daytime trading 0.96% down at
777.5 yuan a tonne. Iron ore prices have risen nearly 2% so far
this year.
On the Singapore Exchange, benchmark May iron ore was 0.2% up at $117.95 a tonne at 0725 GMT after regsitering
some losses in the morning session.
Prices of two other materials used in steelmaking, coking
coal and coke, also weakened, though at a slower pace. Coking
coal eased by 0.22% and coke edged down 0.1%.
Meanwhile, stronger than expected economic growth in China
raised fears of reduced stimulus in the second quarter, weighing
on ferrous metals.
"The performance in the second quarter is typically stronger
than that in the first. Since the (economic) performance is
better than expected, we are concerned that the government will
not lay down many supportive measures to further boost the
economy," said a Rizhao-based iron ore analyst.
Steel futures were mixed. Rebar on the Shanghai Futures
Exchange declined 0.63% to 3,927 yuan a tonne,
hot-rolled coil fell 0.69%, wire rod lost
0.16% and stainless steel gained 0.13%.
Analysts played down the impact of the latest round of
production cuts by some electric arc furnace (EAF) steelmakers
in South China's Guangdong and East China's Zhejiang provinces.
EAF-based steel output accounts for a small portion of China's
total steel production.
(Reporting by Amy Lv and Dominique Patton in Beijing
Editing by Subhranshu Sahu and David Goodman
)
