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Dalian iron ore drops to weakest since Dec. 21
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SGX iron ore falls but stays above $100/tonne
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China steel benchmarks, coking coal prices dip
(Updates prices, SGX iron ore milestone)
By Enrico Dela Cruz
April 24 (Reuters) - Iron ore futures slumped to their
lowest in more than four months on Monday as weak steel demand
in China prompted a production slowdown, while latest reports
from major miners signalled ample supply of the steelmaking
ingredient.
The most-traded September iron ore on China's Dalian
Commodity Exchange ended daytime trade 3.1% lower at
721.50 yuan ($104.69) a tonne. It earlier dropped to 715.50
yuan, its weakest since Dec. 21.
On the Singapore Exchange, the benchmark May iron ore dropped as much as 4.9% to $102.80 a tonne, the lowest
since late November.
Steel benchmarks on the Shanghai Futures Exchange also
dipped, with rebar shedding 3.6% to its weakest since
November, while hot-rolled coil lost 3.7%
"Despite the construction season underway (in China), steel
prices have continued to fall amid weak demand and rising
inventories," ANZ commodity strategists said in a note.
More than 40% of steel furnaces in Tangshan, China's largest steel-producing city in Hebei province, have gone into maintenance, reducing iron ore demand, they said. "There were promising signs of better production discipline among Chinese rebar producers over the past week as mills began reacting to highly negative margins," Atilla Widnell, managing director at Navigate Commodities, said. Iron ore has also lost support from the supply side. Fortescue Metals Group Ltd retained its full-year shipment guidance despite a cyclone this month that disrupted exports from Australia's iron ore hub. Rio Tinto has reaffirmed its annual iron ore shipments forecast after reporting a better-than-expected 15.4% jump in first-quarter shipments from Western Australia.
Brazilian miner Vale SA , meanwhile, reported a 5.8% year-on-year increase in first-quarter iron ore production, while BHP Group Ltd reiterated its annual forecast for Western Australian iron ore output. Wire rod on the Shanghai exchange fell 1.6%, while stainless steel dropped 2.6%. Coking coal and coke on the Dalian exchange dipped 1.2% and 2.2%, respectively.
(Reporting by Enrico Dela Cruz in Manila; Editing by Nivedita Bhattacharjee and Sonia Cheema)
