Credit: REUTERS/CHINA STRINGER NETWORKBy Enrico Dela Cruz
Sept 20 (Reuters) - China's iron ore and steel futures dipped on Tuesday, as concerns about the country's persistent zero-COVID policy and ailing property sector keeping demand subdued outweighed news about a plan to relax the country's border restrictions.
Caution also prevailed ahead of an expected hefty interest rate hike by the U.S. Federal Reserve this week.
The most-traded January iron ore on China's Dalian Commodity Exchange DCIOcv1 ended daytime trade 3.1% lower at 696 yuan ($99.24) a tonne.
Rebar on the Shanghai Futures Exchange SRBcv1 fell 1.5%, while hot-rolled coil SHHCcv1 shed 2%.
"Rolling regional lockdowns under the zero-COVID policy represent a continuing risk for drag, and the housing market remains substantially weakened," J.P.Morgan analysts said in a note.
Beijing issued draft rules aimed at making it easier for some foreigners to enter China for visits to tourism sites along its border - following months of border shutdown due to the pandemic.
China also reported on Tuesday a lower number of new COVID-19 cases, with Beijing reporting no local cases for the fourth consecutive day.
Iron ore's benchmark October contract on the Singapore Exchange SZZFV2 reversed early gains, and was down 0.9% at $96.20 a tonne, as of 0709 GMT.
Dalian coking coal DJMcv1 dropped 1.1%, also pulling back, while coke DCJcv1 trimmed its gains to 1%. Shanghai stainless steel SHSScv1 slipped 0.3%.
"Iron ore has good short-term fundamentals and prices are supported, but the demand for finished (steel) products is not good," analysts at Zhongzhou Futures said in a note.
Hopes also waned for additional policy support in the near term to shore up China's economy that has been hit hard by COVID-19 curbs and property sector downturn.
China made a tough call to hold its benchmark lending rates steady on Tuesday, balancing the need to support economic growth with keeping yuan depreciation in check.
(Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
((enrico.delacruz@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
