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China steel, iron ore futures rebound

By Reuters , 2017-04-21 12:00:00

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China's crude steel output reached a record 72 million tonnes in March as mills anticipated brisk seasonal demand starting this month. But demand has been slow so far. Andrey Rudakov
Iron ore and steel futures in China bounced back on Thursday from a three-day fall and after a volatile session that saw both commodities slide to their lowest in more than three months.
The intraday selloff underlined investor worries over plentiful supply of steel and iron ore and lean demand and the ensuing recovery in prices could be short-lived as the outlook remained shaky.
China's crude steel output reached a record 72 million tonnes in March as mills anticipated brisk seasonal demand starting this month. But demand has been slow so far, leaving mills and traders with hefty inventories, traders said.
"I'm not very sure whether there's enough new demand to match this big production of steel," said a Shanghai-based trader.
The most-active rebar on the Shanghai Futures Exchange closed up 1.8 per cent at 2889 yuan ($US420) a tonne.
The construction steel product bounced back towards the day's peak of 2928 yuan after falling to 2775 yuan, its weakest since January 9.
Iron ore on the Dalian Commodity Exchange climbed 3.1 per cent to end at 488.50 yuan per tonne, near the session's peak of 490 yuan. The contract hit 460.50 yuan earlier, also the lowest since January 9.
There is no rush among Chinese mills to buy iron ore, said the Shanghai trader. "Mills have more choices because there's plenty of port stocks," he said.
Iron ore piggybacked on the rally in steel prices early this year and steel's consequent retreat has dragged down iron ore as well.
The steelmaking raw material is similarly hit by a glut, with stockpiles at China's ports staying near the highest level in more than a decade as arrivals continue.
China's iron ore imports reached 95.56 million tonnes in March, the second-highest monthly volume on record.
Stockpiles of imported iron ore at China's major ports stood at 130.4 million tonnes on April 14, according to data tracked by SteelHome consultancy.
That is not far below the 132.45 million tonnes where it stood on March 24, the highest since SteelHome began tracking it in 2004. That volume would make about 95 million tonnes of steel, enough to build 12,960 replicas of the 324-metre high Eiffel Tower in Paris.
Iron ore for delivery to China's Qingdao port climbed 2.2 per cent to $US64.60 a tonne on Wednesday, according to Metal Bulletin, after a two-day drop.

Source: Reuters

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