MANILA: Benchmark iron ore futures plunged on Tuesday, extending Monday’s sharp losses, as traders charged out of the commodity amid fears of a China clampdown, with Beijing warning it would act against the spread of misinformation on prices.
The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange tumbled by the 10% daily trading limit to 699 yuan ($110.08) a tonne, its weakest since Jan. 18.
The steelmaking ingredient’s front-month March contract on the Singapore Exchange slumped by as much as 13.8% to $127.90 a tonne.
“Iron ore futures remained under pressure amid China’s determination to limit speculative price gains,” ANZ commodity strategists said in a note.
The continued sell-offs reflected growing investor jitters as China’s state planner, together with the market regulator, will summon domestic and foreign iron ore traders for a Feb. 17 meeting, in an effort to ensure market stability, according to two sources and a notice reviewed by Reuters.
China’s National Development and Reform Commission has doubled down on a warning issued last week against unspecified information providers that it claimed were fabricating iron ore prices.
In what appeared to be a concerted effort to cool a sustained rally - Dalian iron ore hit its highest in more than five months last week - the Dalian exchange has announced an increase in the transaction fee for futures contracts for February to May deliveries.
Spot prices of benchmark 62%-grade iron ore in China have pulled back, trading at $149 a tonne on Monday, from a near six-month high of $152.50 last week, data from consultancy SteelHome showed.
Construction steel rebar on the Shanghai Futures Exchange fell 2.8%, while hot-rolled coil shed 2.7%. Stainless steel rose 1.4%.
Dalian coking coal rose 0.8%, while coke ended nearly flat.
Comments
Comments are closed for this article.