AIRLINK 215.00 Increased By ▲ 5.45 (2.6%)
BOP 10.50 Increased By ▲ 0.04 (0.38%)
CNERGY 7.31 Decreased By ▼ -0.04 (-0.54%)
FCCL 34.52 Increased By ▲ 0.13 (0.38%)
FFL 18.50 Increased By ▲ 0.45 (2.49%)
FLYNG 23.26 Increased By ▲ 0.34 (1.48%)
HUBC 131.75 Decreased By ▼ -0.74 (-0.56%)
HUMNL 14.25 Increased By ▲ 0.11 (0.78%)
KEL 5.06 Increased By ▲ 0.03 (0.6%)
KOSM 7.22 Increased By ▲ 0.15 (2.12%)
MLCF 45.14 Decreased By ▼ -0.06 (-0.13%)
OGDC 220.60 Increased By ▲ 2.22 (1.02%)
PACE 7.69 Increased By ▲ 0.11 (1.45%)
PAEL 42.30 Increased By ▲ 0.60 (1.44%)
PIAHCLA 17.55 Increased By ▲ 0.25 (1.45%)
PIBTL 8.73 Increased By ▲ 0.18 (2.11%)
POWERPS 12.50 No Change ▼ 0.00 (0%)
PPL 190.50 Increased By ▲ 1.47 (0.78%)
PRL 42.50 Increased By ▲ 0.17 (0.4%)
PTC 25.74 Increased By ▲ 0.57 (2.26%)
SEARL 104.00 Increased By ▲ 0.04 (0.04%)
SILK 1.04 Increased By ▲ 0.01 (0.97%)
SSGC 41.15 Increased By ▲ 1.91 (4.87%)
SYM 19.29 Increased By ▲ 0.13 (0.68%)
TELE 9.38 Increased By ▲ 0.14 (1.52%)
TPLP 12.95 Decreased By ▼ -0.15 (-1.15%)
TRG 70.15 Increased By ▲ 0.97 (1.4%)
WAVESAPP 10.70 Decreased By ▼ -0.02 (-0.19%)
WTL 1.71 No Change ▼ 0.00 (0%)
YOUW 4.21 Increased By ▲ 0.07 (1.69%)
BR100 12,189 Increased By 109.9 (0.91%)
BR30 36,895 Increased By 292.1 (0.8%)
KSE100 116,983 Increased By 930.5 (0.8%)
KSE30 36,888 Increased By 309.9 (0.85%)

Steel and iron ore futures in China dropped to near three-month lows on Wednesday, extending losses at the start of June after ending May with their biggest-ever monthly falls amid weaker demand. Data showing growth in activity in China's manufacturing sector remained weak in May also weighed on investor sentiment, as a seasonally slow period for steel demand in the world's top consumer begins.
Rainy weather in the southern part of China this month would curb construction activity, said a Shanghai-based trader. That would dent steel consumption that could soften further when summer kicks in over the next months, he said. "Steel prices should continue to trend downward because the oversupply situation will get more serious over the next few months," the trader said.
The most-traded rebar, used in construction, on the Shanghai Futures Exchange was down 2 percent at 1,959 yuan ($297) a tonne by 0319 GMT, after falling as far as 1,946 yuan earlier. The contract touched 1,894 yuan on Monday, the lowest since March 4. Steelmaking raw material iron ore on the Dalian Commodity Exchange slipped 0.4 percent to 346 yuan a tonne. It touched a three-month low of 333 yuan on Monday. Rebar and iron ore futures lost about a quarter of their value in May, their deepest such decline since they were launched in 2009 and 2013, respectively.
The May surveys on China's economy which showed weaknesses in both manufacturing and services underline the challenges facing the world's No 2 economy, said Helen Lau, analyst at Argonaut Securities in Hong Kong. "We expect China's government to continue to implement supportive measures to protect growth and ensure economic recovery," Lau said in a note.
China's steel production should remain high as mills that have recently resumed production in response to the rally in prices earlier this year are likely to continue operating over the next few months, said the Shanghai trader. "So demand for iron ore will still be there until mills start to feel the pain and try to reduce production," he said, adding this could keep spot iron ore at around $50 a tonne in the short term. Iron ore for immediate delivery to China's Tianjin port dropped 1.4 percent to $49.60 a tonne on Tuesday, according to The Steel Index, the lowest since February 29.

Copyright Reuters, 2016

Comments

Comments are closed.