MANILA: Chinese iron ore futures dropped for a fourth session in a row on Wednesday, reflecting concerns over weak demand and excess supply as shipments to China reached a record high in December.
China, the world's top buyer of iron ore, imported 96.27 million tonnes of the steel making commodity last month, customs data showed. That brought 2015 purchases to 952.72 million tonnes, also an all-time high.
China's iron ore imports are usually strong in December as major suppliers Australia and Brazil try to meet their annual shipment targets, said Wang Di, an analyst at CRU Group in Beijing.
"I don't think it's a sign of demand recovering, we haven't seen signs of improvement in steel demand. For this year, we expect to see a continued increase in supply from major miners," said Wang.
The most-traded May iron ore on the Dalian Commodity Exchange closed down 0.8 percent at 300.50 yuan ($46) a tonne after touching a 3-1/2-week low of 298.50 yuan.
Underlining slow demand for iron ore among Chinese steel producers, stocks of the imported material at the country's ports stood at 93 million tonnes last week, near a seven-month high.
Shrinking Chinese demand and tighter environmental measures are likely to push more steel mills to cut production or be shut for good, traders and analysts say, deepening a glut in iron ore as miners continue to boost output.
Iron ore for immediate delivery to China's Tianjin port dropped 2.2 percent to $40 a tonne on Tuesday, according to The Steel Index (TSI), the lowest since Dec. 21.
The bulk commodity resumed its downturn shortly after 2016 began, having rallied to $43.10 a tonne recently on the back of some stabilisation in Chinese steel prices.
ANZ Bank said the renewed weakness in the steel market "leaves iron ore prices exposed to further falls."
Iron ore fell to $37 on Dec. 11, the lowest level recorded by TSI which began compiling data in 2008.
Construction-used rebar slipped 0.6 percent to end at 1,740 yuan a tonne on the Shanghai Futures Exchange, having touched a two-week trough of 1,735 yuan earlier.
Amid weak demand at home, China's steel exports surged to a record 112.4 million tonnes last year. Exports last month jumped 10.9 percent from November to 10.66 million tonnes.
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