- Dalian iron ore, coking coal futures drop about 5 pct
- Shanghai rebar falls to 7-wk low
(Adds coal futures, updates prices)
Chinese iron ore futures tumbled nearly 5 percent on Thursday, falling for a fifth session in six, reflecting oversupply concerns as global miners ramp up output while near-term steel demand in top consumer China looks to be at risk.
Amid weaker futures, spot iron ore dropped below $70 a tonne this week for the first time since July as bids for physical cargoes slipped, traders said.
The most-traded iron ore contract on the Dalian Commodity Exchange DCIOcv1 closed down 4.7 percent at 472 yuan ($72) a tonne, just off the day's trough of 471 yuan, its lowest since July 18.
New iron ore supply to the market includes top producer Vale's
S11D expansion project, which produced 12 million tonnes in January-August, and is expected to churn out 9-11 million tonnes in September-December. The project will help produce up to 90 million tonnes a year from 2018 onwards.
A Shanghai-based trader said a sustained drop in iron ore stockpiles at China's ports did not necessarily indicate firm demand for the raw material.
"There were some delays in the discharge of ships because of stormy weather in the eastern coast of China and also other parts of North Asia," he said.
Port inventory dropped for a seventh consecutive week to 131.85 million tonnes last week, the lowest since mid-April, data from SteelHome consultancy showed. SH-TOT-IRONINV
Iron ore for delivery to China's Qingdao port <.IO62-CNO=MB> rose 1.2 percent to $69.65 a tonne on Wednesday, a day after touching a near two-month low, according to Metal Bulletin.
In a potential risk for Chinese steel demand, Beijing said it would suspend construction of major public projects during winter to improve the capital's air quality.
But Beijing's city authorities have taken down the policy document from their website. It is unclear if the move means the prohibition is no longer in place. A city government official said the document was pulled from the website due to misunderstandings over the rules in media reports.
The most-active rebar on the Shanghai Futures Exchange SRBcv1 slipped 2.4 percent to end at 3,655 yuan per tonne, just off the intraday low of 3,650 yuan, its weakest since Aug. 3.
As steel slid, other steelmaking raw materials also faltered. Coking coal futures on Dalian DJMcv1 fell 5.1 percent to 1,219 yuan a tonne and coke DCJcv1 dropped 3.4 percent to 2,086 yuan.
($1 = 6.5938 Chinese yuan)
