China iron ore futures decline on sluggish pre-holiday downstream consumption

BEIJING: Chinese iron ore futures fell 2% on Thursday, hitting their lowest level in more than two weeks, as weak pre-holiday downstream steel consumption and a government call for less steel output this year weighed on the steelmaking raw material.

The China Iron and Steel Association said the country's steel imports will continue to rise in 2021, and encourages purchases of primary steel products to mitigate the effect of less crude steel production this year that the government has urged.

The association also suggested the government to improve related policies to ease China's reliance on imports of steelmaking ingredients like iron ore.

The most-traded iron ore futures contract on the Dalian Commodity Exchange, for May delivery, fell 1.8% to 1,017 yuan ($156.95) per tonne by 0236 GMT. Earlier in the session, it fell as much as 2% to 1,014 yuan.

Spot 62% iron ore for delivery to China was unchanged at $167.5 per tonne on Wednesday from the previous session, according to SteelHome consultancy.

Construction rebar on the Shanghai Futures Exchange dipped 0.5% to 4,327 yuan a tonne ahead of the Chinese New Year holiday.