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China iron ore slumps as stockpiles rise, demand wanes in China

China iron ore slumps as stockpiles rise, demand wanes in China

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Published on date 14th August 2019.

* Dalian iron ore down as much as 5.6% in morning trade

* Spot iron ore falls to 3-1/2-month low 

BEIJING, Dalian iron ore futures slumped to a two-month low on Monday, extending losses to an eighth session, amid worries of slowing demand as China’s top steel-producing province of Hebei looks to tighten emission requirements.

The most-traded iron ore contract on the Dalian Commodity Exchange, for January 2020 delivery, dropped as much as 5.6% to 609.50 yuan ($86.31) per tonne, the lowest since June 11, before clawing back ground to end 1.1% lower at 638.50 yuan.

Steel and iron ore data analytics firm Tivlon Technologies said the month-long decline in iron ore prices may be coming to an end.

Four consecutive weekly declines for iron ore have been “healthy for the ferrous complex and the various indicators we are seeing is showing very strong fundamentals in China,” the Singapore-based firm said. Last week, iron ore futures logged their biggest weekly drop in over 16 months, pressured by lean demand for steelmaking material while supply concerns eased. The metal closed lower every week since the week ended July 19.

“We remain optimistic on iron ore and steel prices from now until October, and foresee another 25% upside from current levels,” Tivlon Technologies added. Both the most-active construction steel rebar and coke contracts were down around 2% before closing higher.

“All eyes will be on factory data out of China for any further signs of weakness amid the ongoing trade conflict with the U.S.,” ANZ Research said in a note. China’s statistics bureau will release its July output data on Wednesday.



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