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Chinese steel ingredients fall as regulator extends environmental curbs

Chinese steel ingredients fall as regulator extends environmental curbs

Workers are seen on the top of an iron ore pile as a machine works on blending the iron ore, at Dalian Port, Liaoning province, China September 21, 2018. Picture taken September 21, 2018. REUTERS/Muyu Xu/Files

BEIJING : Futures prices for China's steelmaking raw materials faltered on Friday, with the benchmark iron ore contract leading losses, as Beijing mulls to include more cities under its environmental controls.

The Ministry of Ecology and Environment said in a draft guideline on Thursday that it planned to involve 64 regions under key monitoring during winter air pollution campaign.

The regulator said steel mills in those regions would be urged to cut production based on their emission levels during the campaign from October until end-March.

"Stringent production controls have driven market prices lower recently, and pessimistic outlook for demand have intensified," analysts with SinoSteel Futures wrote in a note.

The most-traded iron ore futures on the Dalian Commodity Exchange, for January delivery, slumped 7per cent to 629 yuan (US$97.50) at close. The contract plunged 14per cent this week.

Spot prices of iron ore with 62per cent iron content for delivery to China fell US$4 to US$115.5 a tonne on Thursday, according to SteelHome consultancy.

Coking coal futures on the Dalian bourse fell 3.3per cent to 2,693 yuan a tonne and coke prices slumped 3.5per cent to 3,218 yuan per tonne. They fell 4.7per cent and 8.3per cent, respectively, for the week.

Construction material steel rebar on the Shanghai Futures Exchange declined 2.3per cent to 5,478 yuan a tonne.

Hot-rolled coils, used in cars and home appliances, slipped 1.8per cent to 5,677 yuan per tonne.

Apparent consumption for major steel products including rebar and hot-rolled coils fell 5per cent, as of Sept. 16, to 10.17 million tonnes from the week earlier, data from Mysteel consultancy showed.

Stainless steel futures, however, bucked the trend in morning session and jumped 6.6per cent to 21,825 yuan per tonne.

Chinese financial markets will be closed during Sept. 18-21 for the mid-autumn festival holiday. Markets will resume trade on Sept. 22.

(US$1 = 6.4513 Chinese yuan)

(Reporting by Min Zhang and Shivani Singh; Editing by Rashmi Aich and Sherry Jacob-Phillips)

Source: Reuters

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