Analysts had described the pace of steel demand recovery in China as disappointing, pointing to it as the reason for the drop in prices that squeezed steelmakers' margins. CISA has urged producers to cut output to help ensure a stable cash flow.
"China's Iron and Steel Association sees iron ore prices
remaining weak and volatile, portraying an uncertain outlook not
only for this current quarter but even the balance of the year,"
said Al Munro, of broker Marex.
Both Dalian and Singapore iron ore benchmark contracts were
on track for weekly and deep monthly losses.
CISA's warning "was arguably the catalyst for the sharp drop
in iron ore though the sharp rise in steel inventory for
mid-April when inventory is normally falling added to the slump
in prices," Westpac analysts said in a note.
Rebar on the Shanghai Futures Exchange rose 0.7%,
hot-rolled coil climbed 0.4% and stainless steel added 1.1%, while wire rod shed 1.7%.
Coking coal and coke on the Dalian
exchange dipped 1.5% and 0.4%, respectively.
(Reporting by Enrico Dela Cruz in Manila)
