Iron ore price slumps to three-week low on weak China demand, strong global supply
Property investment in China fell 10.1% in the first half of 2024 from a year earlier.
Chinese steel futures prices inched up on Wednesday, buoyed by Beijing vowing to introduce policies to strengthen consumer spending and optimism that the months-long U.S.-China trade row is finally coming to an end.
China plans to introduce policies to boost domestic spending on items such as automobiles and home appliances this year as part of wider efforts to strengthen consumption, a senior official at the country’s top state planner said.
A variety of steel products, especially hot-rolled coil and cold-rolled coil, are widely used to make autos and household items.
“The main focus of fundamentals in the steel market is now on the demand side,” a Shanghai-based steel trader said.
“The main focus of fundamentals in the steel market is now on the demand side”
“Some mills have already hiked prices for February and March delivery as they expect to see stronger demand after Chinese new year in February,” he added.
The listed unit of China’s largest steel firm, China Baowu Group, said on Sunday it would raise hot-rolled coil and cold-rolled steel coil prices for March delivery by 50 yuan ($7.31) a tonne.
The most-active hot-rolled coil contract on the Shanghai Futures Exchange climbed 0.7 percent to 3,421 yuan a tonne when market closed at 0700 GMT.
Benchmark Shanghai rebar futures also rose marginally by 0.1 percent to 3,507 yuan.
On Tuesday, some Chinese industrial websites reported that the top steelmaking city of Tangshan has issued a smog alert, effective from Jan. 8 to Jan. 14, asking steel mills to cut sintering output by 30 percent to 60 percent, or shut completely depending on emission levels.
The Tangshan government declined to comment but said in a statement that it expects to see air quality worsen during Jan. 10-12.
“But investors are still cautious… they are waiting for progress in Sino-U.S. trade talks,” said the Shanghai trader.
“But investors are still cautious… they are waiting for progress in Sino-U.S. trade talks”
Chinese and U.S. teams ended trade talks in Beijing on Wednesday that lasted longer than expected and officials said details will be released soon, raising hopes an all-out trade war that could badly disrupt the global economy can be avoided.
The most-traded iron ore futures on the Dalian Commodity Exchange pared gains in the afternoon session after hitting a 10-week high at 517 yuan a tonne in early trade. It settled down 0.6 percent at 509.5 yuan.
The Dalian coking coal contract for May delivery inched up 0.1 percent to 1,187.5 yuan a tonne, while coke futures dipped 0.4 percent to 1,946 yuan.
($1 = 6.8373 Chinese yuan renminbi)
(Reporting by Muyu Xu and Dominique Patton; Editing by Rashmi Aich)
