China’s iron ore futures dropped 2% on Thursday, falling for a sixth day in a row, as traders remained wary about expected increase in supplies from miners.
“Sentiment of traders has collapsed... People don’t know how much further the iron ore will go down and everyone is desperately getting rid of the goods they hold,” a Hebei-based iron ore trader said.
The most-traded iron ore contract for January delivery on the Dalian Commodity Exchange has fallen 15% in a week from a record high of 789.5 yuan ($112.06) a tonne on July 31.
It was down 1.3% to 670 yuan a tonne as of 0215 GMT.
Spot cargoes of benchmark 62% iron ore delivery to China fell $6.5, or 6.4%, to $94.5 on Wednesday, its lowest level in three months.
Iron ore inventory at Chinese port has climbed to 121.05 million tonnes this week, up 5% from the 1-1/2-year low level of 115.25 mln T in late June.
However, analysts expect that iron ore prices will find support soon, as demand at mills remain firm as environmental measures in northern China would relax in August.
Utilisation rates at Chinese mills across the country had risen to 67.27% as of last week from 66% in July, according to data compiled by Mysteel consultancy.
* Benchmark Shanghai rebar futures rose 1% to 3,747 yuan a tonne
* Inventory of steel products at Chinese trader increased 300,000 tonnes to 12.83 million tonnes last week as of Aug. 2, its highest level since mid-April, Mysteel data showed
* Hot-rolled coil edged up 1% to 3,695 yuan a tonne
* Dalian coking coal and coke contracts climbed alongside steel prices on Thursday, up 0.9% and 1.2%, respectively
* China’s central bank on Thursday set its official yuan midpoint below the key seven per dollar threshold for the first time since global financial crisis. ($1 = 7.0453 Chinese yuan renminbi)