BEIJING: Chinese iron ore futures fell below a key 1,000 yuan per tonne level on Thursday, falling more than 5% to their lowest in more than two months as domestic consumption remains sluggish on steel production controls.
The most active iron ore futures on the Dalian Commodity Exchange, for September delivery, plunged as much as 5.6% to 999 yuan ($154.54) per tonne, their lowest since May 27. They were down 4.6% to 1,009 yuan a tonne as of 0322 GMT.
"Domestic consumption (for iron ore) is weakening significantly... due to different perception of crude steel output cuts, iron ore prices have been fluctuated recently," analysts with Huatai Futures wrote in a note.
Under the current strict implementations of steel production controls, high iron ore prices are not seen to be supported, Huatai Futures added. Prices of spot 62% iron ore for delivery to China stood at $185.5 per tonne on Wednesday, according to SteelHome consultancy.
Other steelmaking ingredients on the Dalian bourse were up, with coking coal and coke futures both increasing 2.8% to 2,343 yuan and 2,973 yuan a tonne, respectively.
Steel rebar on the Shanghai Futures Exchange, for October delivery, rose 1.0% to 5,415 yuan per tonne.
Hot rolled coils futures, used in cars and home appliances, jumped 1.1% to 5,802 yuan a tonne. The September contract for Shanghai stainless steel futures slipped 0.9% to 18,775 yuan per tonne.
China, the world's biggest coal producer and consumer, will extend the trial operations of 15 mines with a combined annual production capacity of 43.5 million tonnes for another year to boost supply, the state planner said on Wednesday.
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