China's iron ore futures hit 2-week low

MANILA: Iron ore futures slumped to two-week lows on Wednesday as outlook brightened for supply of the steelmaking raw material to China, the world's top steel producer.

Iron ore on China's Dalian Commodity Exchange closed 2.4% lower at 798.50 yuan ($118.43) a tonne. It fell to a low of 792 yuan, its weakest since Sept. 30, earlier in the session.

The Singapore Exchange's front-month contract dropped 1.3% to $115.36 a tonne by 0735 GMT, extending losses into a third session.

Iron ore restocking demand from Chinese steel mills after the Oct. 1-8 holidays has faded, analysts said. Benchmark 62% iron ore's spot price settled at $123.50 a tonne on Tuesday, compared with $125 the day before, according to SteelHome consultancy.

"Iron ore prices will be under downward pressure due to improved effective supply associated with stronger shipments and slightly quicker offloading process," said Richard Lu, a senior analyst at CRU in Beijing.

China's iron ore imports in September rose as supply from major miners increased and port congestion eased, with the coming months pointing to further solid supplies from key players Brazil and Australia.

China's portside inventory piled up to 123.6 million tonnes last week, the highest since March 20, SteelHome data showed.

Coking coal fell 0.6% and coke was virtually flat, after hitting contract highs on Tuesday following unconfirmed reports that China had stopped buying coal from Australia.

"I have not seen any strong responses in terms of coking coal prices in both physical and futures markets," Lu said.

"This is because import restrictions have been in place for almost two years, and some of the shipments that arrived earlier have not been unloaded yet."

Construction steel rebar on the Shanghai Futures Exchange slipped 0.3%, while hot-rolled coil dropped 0.7%. Stainless steel edged up 0.1%.