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Iron ore extends losses on China inventory pile-up, soft steel demand

Iron ore extends losses on China inventory pile-up, soft steel demand


News is brought to you by Mr. Shailesh Karia


Published on date 16th Oct 2020.


* Dalian iron ore at 2-week low, SGX price down for 4th day


* BHP says Chinese coal buyers have made deferment requests


* China coal supplies to tighten this winter on import curbs


* New China steel scrap standards set to be issued - Xinhua


MANILA, Oct 15 (Reuters) - Iron ore futures extended losses on Thursday, with the Dalian benchmark touching a fresh two-week low, as China’s rising port inventories and softening physical demand for steel products weighed on sentiment.


The most-traded January 2021 contract for the steelmaking ingredient on China’s Dalian Commodity Exchange fell as much as 2.7% to 783.50 yuan ($116.53) a tonne, its weakest since Sept. 30.


The Singapore Exchange’s front-month contract slumped 1.4% to $113.50 a tonne.


“Fundamentals...looked shaky, especially with regards to the growing port inventories,” said Howie Lee, an economist at OCBC Bank in Singapore.


Portside iron ore stocks in China, the world`s top steel producer, rose to a seven-month high of 123.6 million tonnes last week, SteelHome data showed. SH-TOT-IRONINV


As top suppliers Australia and Brazil continued to ramp up shipments, and with current Chinese demand for steel products and raw materials relatively soft, China’s iron ore inventories may continue piling up.


China’s high steel output, coupled with slow destocking, have recently bloated domestic inventories, pressuring prices.FUNDAMENTALS


- China is reportedly expected to issue new standards for steel scrap at the end of 2020, in a move that will allow materials meeting them to enter the country after a ban on solid waste imports goes into effect.


- Construction steel rebar on the Shanghai Futures Exchange fell 0.8%, while hot-rolled coil slumped 1.6%. Stainless steel gained 0.1%.


- BHP Group has received deferment requests from Chinese coal customers amid reports that China had put a freeze on accepting Australian coal.


- China’s coal markets are set to tighten over the remainder of 2020 as stringent import restrictions curb supply at a time of robust demand from heavy industry, and with the winter heating season about to kick in.


- Dalian coking coal edged 0.2% lower and coke slipped 0.1%.


 


Source :  https://in.reuters.com/


 





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