UPDATE 1-China iron ore bounces back in late trade as selloff seen overdone
* Dalian iron ore rebounds from 10-week low * Singapore iron ore rises back above $80/T
* Wu'an steps up steel output curbs - Mysteel ADVERTISEMENT
* China to launch coking coal, coke options (Recasts; adds closing prices, graphic)
By Enrico Dela Cruz
MANILA, Aug 22 (Reuters) - Iron ore futures in China rebounded in late trade on Thursday from a 10-week low, while the front-month contract in Singapore rose back above $80 a tonne, following a selloff that was deemed exaggerated.
The most-traded January 2020 iron ore contract on the Dalian Commodity Exchange (DCE) closed 1.1% higher at 600 yuan ($84.81) a tonne, after falling as much as 2.3% earlier in the session.
In the Singapore Exchange, September 2019 iron ore was up 2.6% at $82.81 a tonne by 0705 GMT, having fallen to as low as $79.44 earlier in the day.
Dalian iron ore has shed more than 20% in August, on track to log its worst month since March 2018 after eight consecutive months of
gains, as concerns over supply eased while demand slowed. ADVERTISEMENT
"We believe the selling has been overdone," said ANZ senior commodity strategist Daniel Hynes. "We see prices stabilising at around $90 a tonne in the near term."
The selloff intensified following a downbeat outlook for prices of steelmaking raw materials from mining giant BHP Group and fresh reports about stepped-up steel production curbs in Wu'an city in China's Hebei province.
As the outlook for iron ore demand and supply in top steel producer China remains clouded, analysts expect prices to remain volatile.
"Steel output curbs in China and ongoing trade tension with the U.S. are the key headwinds," Hynes said in a note. "These should result in growth in steel production easing from the 10.8% achieved in H1 2019."
Wu'an, a major production base for wire rod and medium plate, has decided to strengthen efforts to control air pollution by further restricting operations at nine steel mills and two coke plants over a 10-day period from Thursday, according to a Mysteel consultancy report.
This follows a move by the top steelmaking city of Tangshan, also in Hebei, to deepen production cuts over a four-day period ending on Wednesday.
* Benchmark 62% iron ore for delivery to China SH-CCN-IRNOR62 slumped 5.5% on Wednesday to $86.50 a tonne, the lowest since March 29, based on SteelHome consultancy data.
* Benchmark 62% iron ore for delivery to China MT-IO-QIN62=ARG, as assessed by commodity price reporting agency Argus, ended at $83.75 a tonne on Wednesday, down 33% from its peak so far this year of $125.20 on July 3.
* The anti-pollution steel production restrictions in China are widely expected to continue and may even intensify ahead of the nation's National Day celebrations in early October.
* The most-active construction steel rebar contract on the Shanghai Futures Exchange rose 1.3% to 3,715 yuan a tonne.
* Hot-rolled coil, steel used in cars and home appliances, edged up 0.6% to 3,714 yuan a tonne.
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* Other steelmaking ingredients were also higher, with coking coal up 0.6% at 1,334 yuan a tonne, while coke advanced 0.3% to 1,955.50 yuan.
* China will accelerate the launch of coking coal, coke and iron ore options on the DCE in an effort to further enrich hedging tools, the state-backed Securities Times reported on Thursday.
* For the top stories metals and other news, click or
($1 = 7.0745 yuan)
(Reporting by Enrico dela Cruz; Editing by Sriraj Kalluvila and Rashmi Aich
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