BEIJING, April 16 (Reuters) - China's iron
ore futures dropped in line with steel rebar futures on Monday, despite the decline
in stockpiles, while concerns over leaner downstream demand pulled down
sentiment.
The most-active
iron ore contract for September delivery on the Dalian Commodity Exchange DCIOcv1
was down 2.1 percent at 441 yuan ($70.20) a tonne, as of 0253 GMT.
Construction
steel rebar futures on the Shanghai Futures Exchange SRBcv1
dipped 0.9 percent to 3,393 yuan per tonne.
Stockpiles of
rebar continued to fall last week, dropping by 521,600 tonnes to 8.68 million
tonnes. Meanwhile, iron ore inventory at Chinese ports declined by 731,600
tonnes to 160.4 million tonnes compared with a week ago, data from Mysteel Consultancy
showed.
"Process of
reducing steel products inventory is going on smoothly, which helps to lift
sentiment of the market. However, outlook of weak demand in both domestic and
overseas market adds pressure on prices," said Zhu Hao, analyst, Orient
Futures.
Exports in the world's second-biggest economy unexpectedly fell in
March, resulting in a rare trade deficit. Steel exports continued to fall last
month, down 25.3 percent to 5.65 million tonnes, customs data showed on Friday,
as Beijing curbed production to tackle smog, driving up local prices.
On Friday,
China's securities regulator disclosed that the country will allow foreign
investors to trade in domestic iron ore futures markets starting May 4, latest
effort by Beijing to internationalise its commodities market.
"Opening
iron ore futures market will lead to limited effect on prices as Dalian's
prices have already linked tight with Singapore," said Zhu.
"In a short
term, the climbing utilisation rate at steel mills are more likely to drive
iron ore prices, but will add pressure on steel supply."
The utilisation rate at steel mill blast furnace across China increased
by 1.93 percentage points to 66.99 percent last week from prior week, touching
the highest since early November, data from the Mysteel showed.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB rose $0.25 a tonne to $64.96 per tonne on
Friday, according to Metal bulletin.
($1 = 6.2820 Chinese yuan)