News: RIO Dalian iron ore futures drop on surplus concerns

• Iron ore futures fall as much as 2.3%
• Spot 62% iron ore dips to $87 per tonne
• BHP Group iron ore output up 6.3% in Q3

BEIJING, April 21 (Reuters) - Chinese iron ore futures fell in early trade on Tuesday, retreating from a more than 8-1/2-month closing high hit in the previous session, on concerns about surplus supply of the steelmaking raw material as the coronavirus hit demand outside China.

"Steel production cuts outside China are making it even more a single horse race than it already was," according to a Morgan Stanley research note, which warned of rising risks that cargoes not required by smaller importers could be dumped on China's shores.

"China is less in need of additional ore... the diversion of shipments would more likely translate into rising port inventories," it added.

BHP Group (BHP) BHPB.L reported a 6.3% gain in third-quarter iron ore production and maintained its annual forecast at 273-286 million tonnes, despite an expectation of a sharp drop in global steel output excluding China.

The most-traded September contract of iron ore on the Dalian Commodity Exchange DCIOcv1 declined as much as 2.3% to 605 yuan ($85.40) per tonne. It was down 1.9% to 608 yuan by 0215 GMT.

Prices for spot cargoes of iron ore with 62% iron content fell to $87 per tonne on Monday.

Other steelmaking raw materials also fell, with Dalian coking coal DJMcv1 losing 1.2% to 1,119 yuan per tonne, while coke DCJcv1 dived 2.3% to 1,673 yuan per tonne.

FUNDAMENTALS

• Construction rebar on the Shanghai Futures Exchange SRBcv1 , for October delivery, dropped 1.76% to 3,324 yuan per tonne.
• Hot-rolled coil SHHCcv1 fell 1.6% to 3,180 yuan per tonne.
• Shanghai stainless steel SHSScv1 , for June delivery, edged down 0.5% to 13,140 yuan per tonne.
• More than 2.41 million people have been reported to be infected by the novel coronavirus globally and 165,854 have died, according to a Reuters tally.
• Traders desperate to avoid owning oil fled the markets on Monday, sending crude futures into negative territory for the first time ever, in recognition that the coronavirus pandemic has sapped demand for fuel and there is not enough storage for the massive glut of oil present on U.S. soil.
• China has plenty of room for manoeuvre in its macroeconomic policy to cushion against the impact of the coronavirus, officials at the National Development and Reform Commission (NDRC) said on Monday.
• China's central bank said it would conduct a bill swap operation on Tuesday to support the issuance and liquidity of perpetual bonds issued by banks to replenish capital.

($1 = 7.0846 Chinese yuan)