China ferrous futures slide as sluggish downstream demand weighs

Author of the article: Reuters Min Zhang and Enrico Dela Cruz BEIJING/MANILA — Futures for Chinese ferrous raw materials tumbled on Monday, undermined by big drop in steel production and expectations of more output cuts in coming months, while steel prices were also hurt by stagnant downstream consumption. Crude steel output in the world’s top…
China ferrous futures slide as sluggish downstream demand weighs

Author of the article:

Reuters

Min Zhang and Enrico Dela Cruz

BEIJING/MANILA — Futures for Chinese ferrous raw materials tumbled on Monday, undermined by big drop in steel production and expectations of more output cuts in coming months, while steel prices were also hurt by stagnant downstream consumption.

Crude steel output in the world’s top producer of the metal fell for the fifth straight month to 71.58 million tonnes in October, and logged the first decline of year-to-date production in at least five years amid Beijing’s curbs, according to the statistics bureau.

The country’s steel hub Hebei province https://content-static.cctvnews.cctv.com/snow-book/index.html?toc_style_id=feeds_default&share_to=copy_url&item_id=10554368797717084879&track_id=CDD9415B-D8B2-4846-AC2E-393A5801FA3E_658633228503 had also said it would cut production at mills by 30% for four months starting Nov. 15 to reduce air pollutant emissions, said state media, following the environment ministry’s requirement issued in October on steel winter output cuts.

The outlook of fewer steel production has clouded demand for steelmaking ingredients.

Benchmark iron ore futures on the Dalian Commodity Exchange , for January delivery, fell 1.7% to 544 yuan ($85.24) per tonne as of 0320 GMT.

Coking coal prices dropped 11.5% to 1,993 yuan a tonne and coke futures on the Dalian bourse slumped 8.5% to 2,740 yuan per tonne.

Meanwhile, sluggish downstream consumption – especially the property market – has overshadowed steel prices.

China’s property investment grew at slower pace in Jan-Oct from the first nine months, while new construction starts measured by floor area declined at a faster pace, according to the National Bureau of Statistics.

Construction material steel rebar on the Shanghai Futures Exchange slipped 3.6% to 4,178 yuan a tonne.

Hot rolled coils, used in the manufacturing sector, fell 3.3% to 4,476 yuan per tonne.

Shanghai stainless steel futures dipped 0.9% to 17,170 yuan a tonne.

($1 = 6.3820 Chinese yuan renminbi) (Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; editing by Uttaresh.V)

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