Shanghai steel futures extended losses in thin trading on Thursday ahead of a week-long Lunar New Year break on worries that a new coronavirus outbreak in the country would hit construction activity.The Shanghai Futures Exchange’s most-traded steel rebar contract fell 0.4% to 3,523 yuan ($510.28) per tonne on Thursday at around 0215 GMT. It is down about 2% in what would be its first weekly fall in a month.Shanghai’s hot-rolled steel coil, used in cars and home appliances, also slipped 0.4% to 3,534 yuan per tonne and is down nearly 3% for the week so far.“The spreading coronavirus in China is raising concerns that the busy construction period following the Lunar New year will be delayed,” ANZ Research wrote in a note.“Construction activity has been positive for the steel and iron ore sector. However, any disruption at this peak time could rattle the fragile recovery that emerged in December,” it added.China has confirmed 571 total cases and 17 deaths stemming from the outbreak of the coronavirus, which is believed to have emerged late last year from illegally traded wildlife at an animal market in the central Chinese city of Wuhan.Meanwhile, benchmark iron ore futures on the Dalian Commodity Exchange with May expiry held steady after China’s second-biggest steelmaker, HBIS Group, said it secured two letters of credit to purchase iron ore from Brazil’s Vale in a 200 million yuan contract denominated in the Chinese currency.Iron ore prices were last up 0.4% to 667.5 yuan per tonne.Spot prices of the benchmark 62% iron-content ore, as tracked by SteelHome consultancy SH-CCN-IRNOR62, fell by $0.4 to $96.8 per tonne on Wednesday.
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