BEIJING: Chinese iron ore futures fell for the sixth straight day on Friday to their lowest level in 10 weeks as rising supplies and waning demand from steel mills in the world’s top consumer put pressure on the raw material.
The most traded iron ore futures on the Dalian Commodity Exchange slumped to a session low of 402.5 yuan ($64.86) a tonne, a level last seen on April 24. It was 0.4 percent lower on the day at 412 yuan at the midday break.
Persistent weakness in Chinese steel demand, hit by a fragile economy and a slowdown in the property sector, plus growing port inventories of iron ore will continue to weigh on iron ore prices.
“Downstream steel demand remains very poor, and this is further hit by the rainy weather in southern China regions, and the steel demand outlook will remain shaky in the second half of this year,” said Zhao Chaoyue, an analyst with Merchant Futures in Guangzhou.
Real steel consumption in China from January to May fell 8 percent from a year before, according to Zhao’s calculation. “China’s real steel consumption will fall further over the rest of this year.”
Iron ore stocks at 42 Chinese ports rose 1.7 percent to 81.97 million tonnes by Friday from a week before, data from industry consultancy Umetal showed.
Australia’s iron ore exports to China from Port Hedland rose 3 percent to 32.61 million tonnes in June from a month earlier, while total shipments from the port hit a record high, port data showed on Thursday.
The spot price for ore delivered into Tianjin port slumped 5.3 percent on Thursday to $55.8 per tonne, the sixth consecutive daily decline, taking it to the lowest level since April 23.
The benchmark October rebar contract on the Shanghai Futures Exchange gained nearly 1 percent to 2,134 yuan a tone by the midday break after declining for six consecutive days to hit a record low on Thursday.
