SHANGHAI, July 25 Spot iron ore prices extended
their losing streak to touch an eight-month low on Wednesday, as
free-falling prices and a gloomy demand outlook kept Chinese
buyers at bay.
Iron ore prices, down by more than a third since a record
peak in mid-February, have fallen nearly 10 percent in the last
two weeks, denting the profits of top iron ore producers such as
Rio Tinto and Vale SA.
Benchmark iron ore with 62 percent iron content
.IO62-CNI=SI fell for the 10th straight session to $122.90 on
Tuesday, the lowest since Nov. 3, 2011.
The most-active rebar contract for January delivery on the
Shanghai Futures Exchange dipped 0.08 percent to 3,706
yuan ($580) per tonne, within sight of the record low of 3,652
yuan struck on Monday.
Although data out of China this week suggests an economic
recovery in the world's No. 1 steel maker may be imminent,
market participants are doubtful that an uptick in its
construction sector will be strong enough to soak up the
mountains of steel and iron ore that have piled up at ports and
steel makers' yards, especially since Beijing has vowed to
continue its crackdown on the property sector.
China's cabinet said on Tuesday that it would send out eight
inspection teams in late July to ensure local governments
implement its property tightening measures to curb speculation,
dashing any hopes that it may relax property restrictions to
bolster flagging economic growth.
Echoing the industry's bearish views, the world's
fourth-largest steelmaker POSCO said it expects the
Chinese steel market to bottom out in the third quarter due to
Beijing's stimulus measures, but it expects the rebound to be
With around 100 million tonnes of iron ore already piled up
in Chinese inventories, traders said prices could fall further
amid a supply glut.
"I think the reality is that China can't be expected to keep
growing at 200 kilometres per hour and carry the global
economy," said Jonathan Claesen, a trader with Metalmin which is
a major supplier of minerals to China.
Shanghai rebar futures and iron ore indexes:
Shanghai rebar futures and iron ore indexes at 0620 GMT
Contract Last Change Pct Change
SHANGHAI REBAR* 3710 10.00 0.03
PLATTS 62 PCT INDEX 121.5 -1.75 -1.42
THE STEEL INDEX 62 PCT INDEX 122.9 -0.70 -1.83
METAL BULLETIN INDEX 122.24 -1.47 -1.19
#Index in dollars/tonne, show close for the previous trading day
($1 = 6.3858 Chinese yuan)
(Reporting by Ruby Lian and Fayen Wong; Editing by Michael