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Iron Ore, Steel Sliding as Chinese Production Ramps Up

September 9, 2016 at 17:05 by Brent Lantzy

The resumption of production at many Chinese steel mills following mandated shuttering in preparation for last weekend’s G20 summit has increased supply and sent steel and its main component iron ore on a downward spiral.

Customs data from China show steel exports decreasing to 9 million metric tons in July, the lowest level in six months. Although, little emerged from the Hangzhou summit to quell concerns over continued overcapacity issues.

Benchmark 62% fines iron ore deliverable to China’s Qingdao port fell 0.55% to $58.14 per ton on Thursday, the lowest level since July 26, according to Metal Bulletin. This is the fourth consecutive losing session, marking a 2.1% total loss. However, prices are still over 33% above what they were this time last year.

62% fines deliverable to the Tianjin Water Bounce Houses port feel 1.5% to $57.40 per ton on Thursday, according to The Steel Index.

The highest volume January 2017 iron ore futures contract on the Dalian Commodities Exchange posted a 0.3% loss in overnight trading to finish the session at 405.5 yuan.

Analysts at Metal Bulletin report that Chinese iron ore imports surged to 87.72 million tons last month, an 18.4% increase year to date.

The most traded January 2017 steel rebar contract on the Shanghai Futures Exchange settled down 14 yuan at 2,324 yuan per ton, while the January 2017 hot rolled coil contract lost 1 yuan to settle at 2,585 yuan per ton on Friday.

January 2017 coking coal on the Dalian Commodities Exchange finished down by 19.5 yuan on Thursday to close at 900.5 yuan per ton.

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