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Iron ore heads for fifth weekly fall on China demand worries


Iron ore heads for fifth weekly fall on China demand worries | NASDAQ

By Enrico Dela Cruz

Nov 12 (Reuters) - Iron ore prices were on track for a fifth straight weekly fall on Friday, as worries over weak demand for the raw material in top steel producer China outweighed hopes for an easing of financing curbs in the country's debt-laden property sector.

The most-traded iron ore for January delivery on China's Dalian Commodity Exchange DCIOcv1 ended daytime trading 1.6% lower at 546.50 yuan ($85.48) a tonne and was on track for a weekly loss of nearly 3%.

Iron ore's front-month December contract on the Singapore Exchange SZZFZ1 slumped 4.2% to $88.65 a tonne by 0720 GMT and was down 3.1% from last week.

Spot iron ore in China traded at an 18-month low of $90 a tonne on Thursday, down nearly 5% this week, according to SteelHome consultancy data. SH-CCN-IRNOR62

Traders turned cautious after a relief rally in China's ferrous futures markets on Thursday driven by China Evergrande Group 3333.HKmaking last-minute coupon payment to some bondholders and talks of a potential credit easing in the property sector. The sector accounts for about a quarter of domestic steel demand.

"The question is more on implementation details," analysts at J.P. Morgan said in a note, referring to the potential credit-easing measures.

Still, China will stand firm on policies to curb excess borrowing by property developers even as it makes financing tweaks to help home buyers and meet "reasonable" demand amid an industry-wide liquidity crunch, say bankers and analysts.

Adding to the downbeat outlook for China's steel and iron ore demand, ArcelorMittal - the world's largest steelmaker - said it expects a slight contraction in Chinese steel demand in 2021, citing the country's real estate sector.

Construction steel rebar on the Shanghai Futures Exchange SRBcv1 shed 2.3% after a 5% jump in the previous session, while hot-rolled coil SHHCcv1 dropped 1%. Stainless steel SHSScv1 slipped 2.1%.

Dalian coking coal DJMcv1 slid 4.9%, while coke DCJcv1 retreated 2.9%.

China ferrous futures 2021 performance

(Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu)



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