China iron ore futures drop as steel output control dampens demand

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BEIJING — Benchmark iron ore futures in China fell more than 3% on Wednesday on cooling demand as mills controlled their crude steel production, while arrivals of the steelmaking ingredient gained.

Some steel producers in China’s Jiangsu, Fujian and Yunnan provinces were told by the government to cut production as the country aims to keep its annual output no higher than it made in 2020.

Meanwhile, iron ore arrivals in China recovered last week. Portside inventories of the ingredient rose for the third week and stood at 127.34 million tonnes as of July 18, according to SteelHome consultancy.

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The most-traded iron ore futures on the Dalian Commodity Exchange, for September delivery, declined 3.1% to 1,184 yuan ($182.83) per tonne as of 0330 GMT.

Spot prices of iron ore with 62% iron content for delivery to China fell $1 to $221.5 per tonne on Tuesday, data from SteelHome showed.

Other steelmaking ingredients increased.

Dalian coking coal rose 1.3% to 2,079 yuan a tonne and coke futures jumped 2.2% to 2,737 yuan per tonne.

FUNDAMENTALS

* Steel rebar on the Shanghai Futures Exchange, for October delivery, inched up 0.5% to 5,574 yuan a tonne.

* Hot rolled coils, used in cars and home appliances, rose 0.9% to 5,949 yuan per tonne.

* Shanghai stainless steel futures, for August delivery, increased 0.5% to 18,410 yuan a tonne.

* Rio Tinto is asking train drivers working in mineral-rich Western Australia to work more hours, following a move by rival BHP Group, as miners rush to ship millions of tonnes of iron ore amid soaring prices for the steel making material. ($1 = 6.4761 Chinese yuan renminbi) (Reporting by Min Zhang and Shivani Singh; Editing by Shailesh Kuber)