Benchmark iron ore futures in China slumped more than 4per cent to their lowest since March 24, as increase in portside inventories and curbs on steel production weighed on prices.
Iron ore inventories at 45 ports in China increased by 260,000 tonnes last week to 127 million tonnes, data from Mysteel consultancy showed.
The gain comes amid intensifying controls on crude steel production across the country to meet its annual target of no higher output than 2020, this year.
“In the short term, iron ore demand and supply did not worsen significantly, prices fell but are still at high levels,” analysts with Huatai Futures wrote in a note.
However, with government stepping up steel output cuts, iron ore could face increasing pressure, it said.
The most-actively traded iron ore futures on the Dalian Commodity Exchange, for January delivery, fell as much as 4.6per cent to 806 yuan (US$124.36) per tonne. They closed down 3.7per cent at 813 yuan a tonne.
Spot prices of iron ore with 62per cent iron content for delivery to China was unchanged at US$162 a tonne on Tuesday, according to SteelHome consultancy.
Other steelmaking ingredients were mixed, with Dalian coking coal inching up 0.3per cent to 2,196 yuan a tonne, while coke futures fell 2.0per cent to 2,845 yuan a tonne.
FUNDAMENTALS
* Construction rebar on the Shanghai Futures Exchange dropped 3.7per cent to 5,144 yuan a tonne.
* Hot rolled coils lost 3.1per cent to 5,482 yuan per tonne.
* Stainless steel futures on the Shanghai bourse fell 1.0per cent to 18,120 yuan a tonne.
* China is facing a high profile test of its commitment to curbing industrial pollution after steel output surged in the first half of the year to well beyond its target of capping production at 2020’s peak, sending emissions to new highs.
Source: Reuters