Dalian iron ore futures fell in early trade on August 6, extending losses into a fourth session, dragged by downbeat outlook for demand for the steelmaking ingredient in China, where steel inventory has piled up due to tepid consumption.
Steel futures were also weaker as prospects for global economic growth and steel consumption dimmed due to the escalating U.S.-China trade war.
The most-traded iron ore contract on the Dalian Commodity Exchange, with January 2020 expiry, slumped as much as 2.8% to 689 yuan/t ($97.72/t). It was down 0.6% as of 0147 GMT.
"We have been cautious about iron ore for some time now and continue to maintain that view going into August," said Edward Meir, commodity consultant at INTL FCStone.
"Weaker Chinese steel rebar prices should have more of an impact just as iron ore supply starts to improve," he said in a monthly market outlook.
Fundamentals
Benchmark spot 62% iron ore for delivery to China plummeted 6.3% to $105 a tonne on August 5, when iron ore futures in both Dalian and Singapore markets crumbled. It was the weakest since June 12 this year, data showed.
The most-active construction steel rebar contract on the Shanghai Futures Exchange, expiring in October 2019, edged down 0.4% to 3,763 yuan/t.
Hot-rolled steel, used in cars and home appliances, slipped 0.4% to 3,695 yuan/t.
Other steelmaking raw materials were firmer, with Dalian coking coal up 0.5% at 1,411 yuan/t, while coke gained 0.9% to 2,062.50 yuan.
Markets news
Global stocks extended their already substantial losses and the offshore yuan hit an all-time low on August 6 after Washington designated Beijing a currency manipulator in a rapid escalation of the U.S.-China trade war.
Source:sxcoal
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