SHANGHAI, Jan 27: China’s iron ore futures dropped for a fifth straight day on Tuesday as steel mills cut output, curbing demand for the raw material and dragging spot prices to their lowest in more than 5-1/2 years. The lower iron ore prices and rising imports from Australia and Brazil have forced a growing number of Chinese mines to suspend production, including a state-owned one in northern Hebei province, industry sources said. Li Wenjing, an analyst with Industrial Futures in Shanghai, estimated that about 60 million tonnes of domestic iron ore capacity could be shut down this year. ‘However, the cut in output by domestic miners will be offset by overseas expansion,’ Li added. Iron ore futures for May delivery on the Dalian Commodity Exchange fell 0.2 percent to 470 yuan a tonne, down a fifth straight day.
Steel demand in the world’s biggest producer has also slowed as construction activities have been hampered by cold weather, further dampening prices.
The most-traded May rebar contract on the Shanghai Futures Exchange fell 0.1 percent to 2,459 yuan ($393) a tonne by the midday break.
Benchmark 62 percent grade iron ore for immediate delivery to China <.IO62-CNI=SI> fell 3.9 percent to $63.30 a tonne on Monday, posting its biggest daily loss since November last year and touching its lowest level since May 2009, according to data compiled by the Steel Index. Rebar and iron ore prices at 0330 GMT Contract Last Change Pct Change SHFE REBAR MAY5 2459 -3.00 -0.12 DALIAN IRON ORE DCE DCIO MAY5 470 -1.00 -0.21 THE STEEL INDEX 62 PCT INDEX 63.30 -2.60 -3.95 METAL BULLETIN INDEX 63.54 -2.88 -4.34 Dalian iron ore and Shanghai rebar in yuan/tonne Indexes in dollars/tonne, show close for previous trading day ($1 = 6.2505 Chinese yuan)
(AGENCIES)
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