China iron ore futures drop on Tangshan curbs, steel resilient amid firm demand

March 16, 2021

(Reuters) - Chinese iron ore futures dropped more than 6% on Monday after top steelmaking city Tangshan pledged to cut emissions by 50% during the heavy pollution period and punish those who fail to implement production curbs.

The most-active iron ore on the Dalian Commodity Exchange , for May delivery, slumped as much as 6.3% to 1,005 yuan ($154.55) a tonne, the lowest since Feb. 8. The contract fell 4.2% to 1,028 yuan by 0330 GMT.

Prices for other steelmaking ingredients also slumped on concerns of further output controls.

Dalian coking coal futures dived 4.1% to 1,470 yuan per tonne.

Coke futures were down 3.6% to 2,216 yuan, after hitting as low as 2,208 yuan a tonne, the lowest since Nov.5, 2020.

Steel futures on the Shanghai Futures Exchange, however, were range-bound.

China’s property and infrastructure investment surged 38.3% and 36.6% in the first two months, respectively, the statistics bureau said.

Industrial output in the world’s second-largest economy also beat market expectations in the Jan-Feb period helped with brisk recovery in the manufacturing sector.

Construction rebar on the Shanghai bourse dipped 0.5% to 4,734 yuan a tonne.

Hot rolled coil, used in cars and home appliances, gained 0.2% to 5,023 yuan a tonne.

Stainless steel futures slipped 0.4% to 14,000 yuan a tonne.

FUNDAMENTALS

* Portside inventories of iron ore in China gained by 1.4 million tonnes to 130.9 million tonnes as of Mar.12 from the week earlier, data compiled by SteelHome showed. SH-TOT-IRONINV

* China’s crude steel output rose 12.9% in Jan-Feb on an annual basis, as mills increased production in expectation of more demand from the construction and manufacturing sectors.

* China’s second biggest steelmaker HBIS Group vowed to bring its carbon emissions to a peak in 2022.

$1 = 6.5028 yuan Reporting by Min Zhang and Dominique Patton; editing by Uttaresh.V

To Read More: https://www.reuters.com/article/idUSL4N2LD10A

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