Dalian iron ore edges higher; stainless steel shimmers (updated)

Mexan

14/07/2021 08:36

* Signs emerge pointing to tepid Chinese steel demand
    * China's steel exports to top buyer ASEAN countries decline
    * Shanghai stainless steel futures scale record high

 (Updates prices, adds details and graphic)
    By Enrico Dela Cruz
    July 14 (Reuters) - Dalian iron ore futures ticked higher in
range-bound trade, while the Singapore benchmark slipped on
Wednesday, pressured by concerns about demand prospects for the
steelmaking raw material in top steel producer China.
    The most-traded September iron ore on China's Dalian
Commodity Exchange  DCIOcv1  ended daytime trade 0.8% higher at
1,219.50 yuan ($188.36) a tonne.
    Iron ore's most-active August contract on the Singapore
Exchange  SZZFQ1  was down 0.5% at $209.15 a tonne, as of 0706
GMT.
    "There are early signs of a turning point in Chinese demand
with falling Chinese steel prices crushing margins for steel
mills," Justin Smirk, a senior economist at Westpac in Sydney,
said.
    Lower cement prices in China, rebar makers possibly starting
to incur losses, and excavator sales in May posting the first
monthly drop since early 2020 point to slowing construction
activity that has also been hampered by an unfavourable weather,
Smirk said.
    China's steel exports also remained weak, hit by tepid
demand in Southeast Asian countries - its largest buyers of the
construction and manufacturing material - due to a fresh wave of
COVID-19 infections in the region, Mysteel consultancy reported.
    Concerns about China's efforts to curb steel output this
year to meet its carbon emissions goal also kept market
participants largely at bay.
    Iron ore supply constraints, meanwhile, kept spot prices
underpinned, with the support particularly stronger for
high-grade materials, as China's intense emission-control
campaign pushed steel producers to use top-quality and
environment-friendly ore.
    Rebar on the Shanghai Futures Exchange  SRBcv1  rose 2.9%,
while hot-rolled coil  SHHCcv1  jumped 2.6%.
    Shanghai stainless steel  SHSScv1  climbed as much as 4.1%
to 17,965 yuan a tonne, its strongest level since trading of
stainless steel contracts started on the Shanghai bourse in
2019.
    High demand and low inventory in China lifted stainless
steel prices, Huatai Futures analysts said in a note.
    Dalian coking coal  DJMcv1  advanced 3.8% and coke  DCJcv1 
gained 2.7%.    

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GAP WIDENS BETWEEN TOP- AND LOW-GRADE IRON ORE IN CHINA GAP
WIDENS BETWEEN TOP- AND LOW-GRADE IRON ORE IN CHINA    https://tmsnrt.rs/2VzNgXf
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 (Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu
Sahu and Sherry Jacob-Phillips)
 ((enrico.delacruz@thomsonsonreuters.com))