MANILA: China’s ferrous futures fell on Monday, pressured by mounting
domestic steel stocks and rising portside iron ore inventory, indicating a slow
recovery in demand even as the latest indicators point to a rebounding economy.
The most-traded May iron ore on China’s Dalian
Commodity Exchange ended morning trade 0.7% lower at 854.50 yuan ($125.07) a
tonne. On the Singapore Exchange, the steelmaking ingredient’s benchmark March
contract was down 2.2% at $124.72 a tonne, as of 0431 GMT.
On the Shanghai Futures Exchange, rebar shed 0.8%,
while other steel benchmarks also dropped. Hot-rolled coil dipped 0.6%, wire
rod lost 0.8%, and stainless steel slipped 0.5%.
“Industrial metals markets will need to wait for
February and March economic data to get a true sense on health of the Chinese
economy,” Navigate Commodities Managing Director Atilla Widnell said.
Traders were cautious despite data showing new
bank loans in China jumped more than expected to a record 4.9 trillion yuan
($717.21 billion) in January, while new home sales in 16 Chinese cities rose
for the second straight week.
“The profits of steel mills have not improved,”
Huatai Futures analysts said in a note. “The continuous increase in inventory
will cause short-term adjustments in finished product prices.”
Steel inventories held by Chinese traders, which
have been steadily rising since late December, increased further by 1.5 million
tonnes over Feb. 3-9, according to Mysteel consultancy’s latest stocks survey.
Meanwhile, portside iron ore inventory climbed
last week to 138.5 million tonnes, the highest since mid-September, SteelHome
consultancy data showed.