Top steel
producer China is in the first of an expected three waves of COVID-19 cases
this winter, according to the country's chief epidemiologist, forcing many
people to stay home to protect themselves.
The
most-traded iron ore for May delivery on China's Dalian Commodity Exchange
slumped as much as 3.9% to 792 yuan ($113.49) a tonne, after a three-session
rally that had brought it to a six-month high.
By Enrico Dela Cruz
Steel futures and prices of steelmaking
ingredients in China fell on Monday as a surge in local COVID-19 cases prompted
traders to book some profit from a recent rally spurred by the easing of
coronavirus restrictions.
Top steel producer China is in the first of
an expected three waves of COVID-19 cases this winter, according to the
country's chief epidemiologist, forcing many people to stay home to protect
themselves.
The
most-traded iron ore for May delivery on China's Dalian Commodity Exchange slumped as much
as 3.9% to 792 yuan ($113.49) a tonne, after a three-session rally that had
brought it to a six-month high.
On the Singapore Exchange, the steelmaking ingredient's benchmark January
contract was down 2.2% at $108.85 a tonne, as of 0330 GMT.
China's COVID-19 surge "might provoke an increasing proportion of the
nervous population to wait out the current wave at home, destroying economic
activity in the process", Navigate Commodities Managing Director Atilla
Widnell said.
The market pullback was broad-based even as Beijing, in a statement on Friday
following an agenda-setting meeting, pledged to focus on stabilising its
$17-trillion economy in
2023 and step up policy adjustments to ensure key targets are hit.
Rebar on the Shanghai Futures Exchange fell 2.8%, hot-rolled coil dipped 3.1%,
wire rod shed 2%, and stainless steel tumbled 4.2%.
Dalian coking coal slumped 5.2% and Dalian coke dropped 5.8%.
Current market fundamentals were also depressing.
Average daily crude steel production among member mills
of China Iron & Steel Association (CISA) eased over Dec. 1-10 after rising
during the prior two 10-day periods, down by 2.1% or 41,800 tonnes from late
November to 1.99 million tonnes, Mysteel consultancy reported, citing CISA data.