BEIJING (Reuters) - China’s steel futures eased for a second day on Wednesday as a sluggish real estate market weighed on the demand outlook, while a pick-up in steel inventory last week also weighed.
Property sales in Beijing during the week-long holiday between Oct. 1 and Oct. 7 were down, with new home sales registered with the government reaching the lowest level since 2014, according to state-run broadcaster CCTV.
The most-active construction steel rebar contract on the Shanghai Futures Exchange (ShFE), for January delivery, fell as much as 1.1% to 3,390 yuan ($474.81) a tonne. It closed down 0.4% at 3,413 yuan.
Futures for hot-rolled coil steel, used in cars and home appliances, for January delivery on the ShFE slipped 0.2% to 3,428 yuan per tonne.
Steel inventories in China stood at 11.4 million tonnes as of Oct.7, up 594,100 tonnes compared with the week ended Sep. 26 but still the second lowest since late June, according to data from consultancy Mysteel.
“Output curbs have eased after the National Day holiday, which piled pressures to (the) supply side,” Huatai Futures wrote in a note. There is limited room for a rebound as the January contract is seasonally weak, it added.
The most actively traded iron ore futures contract on the Dalian Commodity Exchange, for January 2020 delivery, declined 2.9% to 639 yuan a tonne, snapping a five-session rally.
“We are seeing weakness in the iron ore price. There is a trend where steel mills are looking to reduce their production,” said Darren Toh, steel and iron ore data scientist at Singapore-based Tivlon Technologies.
* Prices for spot cargoes of benchmark iron ore with 62% iron content for delivery to China [SH-CCN-IRNOR62] stood at $94 a tonne on Tuesday, flat from Sept.30.
* Stainless steel for February delivery edged up 0.2% to 15,675 yuan a tonne.
* Other steelmaking ingredients inched down, with Dalian coking coal for January delivery down 0.8% at 1,251 yuan a tonne and coke 1.3% lower at 1,851 yuan.
* China’s new bank loans likely rose in September but other key gauges of credit growth remained lackluster, a Reuters poll showed, reinforcing expectations Beijing needs to deliver more support to stabilize the economy as trade pressures build.
Reporting by Min Zhang and Tom Daly; editing by Uttaresh.V and Jan Harvey