China's iron ore futures ticked up on Friday following news that Australian miners were bracing for a tropical cyclone, but the steelmaking raw material marked its biggest weekly loss in six months, hammered by worries over the coronavirus epidemic.
The Dalian Commodity Exchange's most-traded iron ore contract ended the session up 0.4% at 587 yuan ($84.09) a tonne after moving sideways in early trade. Tumbling 11% since Feb. 3, when trading resumed after an extended Lunar New Year holiday, Dalian iron ore posted its biggest weekly decline since early August last year.
Travel curbs adopted in mainland China, where the death toll from the epidemic has risen by more than two-thirds this week to 636, with 31,161 cases of infections, have disrupted economic activity in the world's top steel producer and iron ore buyer. "In an effort to stymie the spread of the infection, authorities in China have set up barriers that will ultimately snarl supply chains, diminish business confidence and slowdown international trade," ANZ commodity strategists wrote in a note.
Around 90% of China's major iron ore ports are in the provinces that have travel restrictions or are still on extended holidays, they said. "To complicate things, a tropical cyclone is now bearing down on the Pilbara coast, home to Australia's largest iron ore port," they added.
Iron ore miners in Australia such as Rio Tinto and BHP Group , among China's biggest suppliers, said they were preparing for a tropical cyclone that will hit the country's iron ore-rich Pilbara region over the weekend. Spot iron ore prices remained volatile, with the benchmark 62% iron-content ore for delivery to China settling at $83.30 a tonne on Thursday, down from $83.80 on Wednesday, SteelHome data showed.
Chinese President Xi Jinping assured US President Donald Trump on Friday that China was doing all it can to contain the coronavirus outbreak. China's central bank has vowed to step up support for the economy to cushion the blow from the outbreak.
The most-traded construction steel rebar on the Shanghai Futures Exchange rose 0.9% but posted its biggest weekly loss since August last year. Hot-rolled steel coil advanced 0.6% but fell 5.9% in its worst week since November 2018. Other ferrous raw materials extended their rallies on tight supply concerns, with coking coal up 1.0%, while coke rose 0.5 percent.
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