Chinese iron ore futures fellto a one-week low on Tuesday as trade data showed that imports
of the steelmaking material fell steeply in August, underscoring worries that steel demand in the world's top producer would
remain subdued.
The most-traded January iron ore contract on the Dalian Commodity Exchange fell a second straight day,
dropping 1.6 percent to 380 yuan ($59.67) a tonne by the midday break, the lowest mark this month.
"Some mills will recover output along with construction activity, (but) the domestic economy still faces downward
pressure, while the volatility in global financial markets persists, denting sentiment," said Qiu Yuecheng, analyst with
steel trading platform Xiben New Line E-Commerce in Shanghai.
Qiu expects steel prices to remain weak, putting further pressure on iron ore.
Chinese iron ore imports fell 14 percent in August from the previous month, customs data showed on Tuesday, as persistent
weakness in steel demand forced steel mills to cut back on imports of the raw material.
Faltering domestic demand and higher global prices have also boosted Chinese steel exports by 26.5 percent to 71.87 million tonnes for January-August from a year ago, customs data showed.
The most-traded January rebar futures on the ShanghaiFutures Exchange stood almost steady at 1,923 yuan a
tonne by the midday break.
However, steel mills have stepped up buying of iron ore to ramp up production, lifting spot prices.
Chinese steel mills are expected to resume production this week after curbing operations as Beijing held a parade for the
70th anniversary of the end of World War Two.
Iron ore for immediate delivery to China's Tianjin port. IO62-CNI=SI rebounded 1.8 percent to $56 a tonne on Monday,
according to The Steel Index.
source: http://in.reuters.com