China iron ore futures fall on increasing supply from miners – Nasdaq

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Credit: REUTERS/CHINA STRINGER NETWORK

Chinese iron ore futures fell on Wednesday, on rising shipments from major suppliers, and were followed by a decline in steel prices as traders fretted over potential government controls.

Adds details and updates with closing prices

BEIJING, June 16 (Reuters)Chinese iron ore futures fell on Wednesday, on rising shipments from major suppliers, and were followed by a decline in steel prices as traders fretted over potential government controls.

Iron ore shipments from Australia and Brazil stood at 26.14 million tonnes last week, up by 1.1 million tonnes from the week earlier, data from Mysteel consultancy showed.

The most actively traded iron ore futures on the Dalian Commodity Exchange DCIOcv1, for September delivery, fell 1.5% to 1,198 yuan ($187.26) per tonne at close.

Demand for the steelmaking ingredient has been supported by robust production at mills as the sector enjoyed decent profit margins.

China’s crude steel output last month hit a record at 99.45 million tonnes, data from the National Bureau of Statistics showed.

However, analysts with SinoSteel Futures warned that there is limited room for further growth in iron ore demand.

“Environmental protection measures in Tangshan have not been relaxed in the short term and have become more stringent,” SinoSteel Futures said in a note, adding that the room for higher demand had hit a bottleneck.

The statistics bureau also flagged fast-growing commodity prices and called for strengthening market adjustment, according to a briefing on Wednesday afternoon.

The national reserves administration said it will release reserves of base metals such as copper, aluminium and zinc in near term to stabilise commodity prices.

The most-traded steel rebar on the Shanghai Futures Exchange SRBcv1, for October delivery, closed down 2.9% at 5,014 yuan a tonne.

Hot-rolled coils SHHCcv1, used in cars and home appliances, dropped 2.7% to 5,280 yuan per tonne.

Shanghai stainless steel futures SHSScv1, for July delivery, slipped 1.6% to 16,075 yuan a tonne.

Other steelmaking ingredients gained, with Dalian coking coal DJMcv1 rising 0.7% to 1,953 yuan a tonne and coke futurse DCJcv1 up 0.8% at 2,689 yuan per tonne.

($1 = 6.3976 Chinese yuan)

(Reporting by Min Zhang and Dominique Patton; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)

((min.zhang@thomsonreuters.com; (8610) 5669-2105;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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