BEIJING/MANILA: Chinese steel and steelmaking ingredients futures faltered on Wednesday, with stainless steel plunging 4.2% and iron ore closing down 3.4%, on worries of a slow global economic recovery from the coronavirus-led slump and weak domestic demand. The most-traded stainless steel futures contract on the Shanghai Futures Exchange for November delivery, dived as much as 5.5% to 13,995 yuan ($2,043.51) per tonne. It closed at 14,190 yuan.

Other steel prices on the Shanghai bourse also fell. Construction steel rebar for January delivery, fell 2.2% to 3,658 yuan per tonne. Hot-rolled coils, used in the manufacturing sector, dropped 2.9% to 3,752 yuan a tonne. "The prices drop today came as the market is still pessimistic on global economic recovery," said a Beijing-based trader, who asked not to be named.

"Meanwhile, steel demand did not increase obviously and failed peak-season expectations." Futures for steelmaking raw materials also dropped. The most active iron ore contract on the Dalian Commodity Exchange ended down 3.4% to 825 yuan a tonne. Dalian coking coal dipped 0.9% and coke fell 1.3%.

Spot prices of iron ore with 62% iron content for delivery to China rose by $1 to $128.5 per tonne on Tuesday from the previous session. China stocks dropped the most in six weeks on Wednesday following Wall Street's tech rout, with heightened Sino-US tensions and falling oil prices also curbing risk appetite.

China's factory gate prices fell for the seventh straight month in August, but at the slowest annual pace since March, suggesting the industries of the world's No. 2 economy continued to recover from the sharp coronavirus-induced downturn.

New local government special bond issuance in China totalled 2.8969 trillion yuan ($422.84 billion) by end-Aug, accounting for 77.3% of the year's quota, the finance ministry said on Wednesday.