BEIJING: Chinese iron ore futures fell on Wednesday, on rising shipments from major suppliers, and were followed by a decline in steel prices as traders fretted over potential government controls.
Iron ore shipments from Australia and Brazil stood at 26.14 million tonnes last week, up by 1.1 million tonnes from the week earlier, data from Mysteel consultancy showed.
The most actively traded iron ore futures on the Dalian Commodity Exchange, for September delivery, fell 1.5 percent to 1,198 yuan ($187.26) per tonne at close.
Demand for the steelmaking ingredient has been supported by robust production at mills as the sector enjoyed decent profit margins.
China’s crude steel output last month hit a record at 99.45 million tonnes, data from the National Bureau of Statistics showed.
However, analysts with SinoSteel Futures warned that there is limited room for further growth in iron ore demand.
“Environmental protection measures in Tangshan have not been relaxed in the short term and have become more stringent,” SinoSteel Futures said in a note, adding that the room for higher demand had hit a bottleneck.
The statistics bureau also flagged fast-growing commodity prices and called for strengthening market adjustment, according to a briefing on Wednesday afternoon.
The national reserves administration said it will release reserves of base metals such as copper, aluminium and zinc in near term to stabilise commodity prices.
The most-traded steel rebar on the Shanghai Futures Exchange, for October delivery, closed down 2.9percent at 5,014 yuan a tonne.
Hot-rolled coils, used in cars and home appliances, dropped 2.7percent to 5,280 yuan per tonne. Shanghai stainless steel futures, for July delivery, slipped 1.6percent to 16,075 yuan a tonne.
Other steelmaking ingredients gained, with Dalian coking coal rising 0.7percent to 1,953 yuan a tonne and coke futurse up 0.8percent at 2,689 yuan per tonne.—Reuters
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