BEIJING: Futures prices for China’s steelmaking raw materials faltered on Friday, with the benchmark iron ore contract leading declines, as Beijing mulls to include more cites under its environmental controls.
The Ministry of Ecology and Environment said in a draft guideline on Thursday that it planned to involve 64 regions under key monitoring during winter air pollution campaign.
The regulator said that steel mills in those regions would be urged to cut production based on their emission levels during the campaign from October to end-March.
“Stringent production controls have driven market prices lower recently, and pessimistic outlook for demand have intensified,” analysts with SinoSteel Futures wrote in a note. The most-traded iron ore futures on the Dalian Commodity Exchange, for January delivery, tumbled 5% to 643 yuan ($99.58) a tonne as of 0247 GMT. They had dived 12% so far this week. Spot prices of iron ore with 62% iron content for delivery to China fell $4 to $115.5 a tonne on Thursday, according to SteelHome consultancy. Coking coal futures on the Dalian bourse fell 3.1% to 2,700 yuan a tonne and coke prices slumped 3.2% to 3,227 yuan per tonne. Construction material steel rebar on the Shanghai Futures Exchange declined 2.4% to 5,470 yuan a tonne. Hot rolled coils, used in cars and home appliances, slipped 1.6% to 5,685 yuan per tonne. Apparent consumption for major steel products including rebar and hot rolled coils fell 5% as of Sept. 16 from the week earlier to 10.17 million tonnes, data from Mysteel consultancy showed. Stainless steel futures, however, bucked the trend in morning session and jumped 4.3% to 21,360 yuan per tonne. Chinese financial markets will be closed during Sept. 18-21 for the mid-autumn festival holiday. Markets will resume trade on Sept. 22.
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