October 14, 2019 / 2:59 AM / a month ago

China iron ore flat as curbs on steel output cloud demand outlook

* China’s Linfen city also sets steel output curbs - ANZ

* Market awaits Vale’s quarterly iron ore output report

* China’s iron ore imports surge to highest since Jan 2018

By Enrico Dela Cruz

MANILA, Oct 14 (Reuters) - Iron ore futures in China were nearly unchanged in early trade on Monday as market participants assessed the impact of new steel production restrictions in some of the nation’s industrial areas on demand for the key steelmaking raw material.

Dalian Commodity Exchange’s most-traded iron ore contract , with January 2020 expiry, was down 0.1% at 653 yuan ($92.28) a tonne, as of 0235 GMT.

China’s spot 62% iron ore benchmark SH-CCN-IRNOR62 was at $92.50 a tonne on Friday, based on data from SteelHome consultancy.

“Traders have been wary of the impact of ongoing restrictions on steel mills in China,” said Daniel Hynes, senior commodity strategist at ANZ.

China’s top steelmaking city of Tangshan issued new anti-pollution restrictions on mill operations, effective from Oct. 10 to Oct. 31, according to industry websites.

Another Chinese city, Linfen, has also ordered steelmakers to stop sintering and pelletizing operations from Oct. 10, Hynes said.

As fresh steel production restrictions may curb iron ore demand in China, market participants are also keeping an eye on supply-side issues, he said, with top iron ore miner Vale SA set to release its quarterly output report this week.

“(Vale’s report) may shed light on its progress to restart operations following the deadly dam disaster earlier this year,” Hynes said.

The Brazilian mining regulator has shut 54 dams so far in the second half of 2019 due to lack of certification, including 17 owned by Vale, he said.

Vale’s reduced iron ore output following the dam disaster and shutdowns has tightened global supply and had pushed prices to five-year peaks in recent months.

FUNDAMENTALS

* China’s iron ore imports rose for a third straight month in September to 99.15 million tonnes, the highest level since January 2018, according to Reuters’ calculations based on customs data released on Monday.

* For the first nine months of the year, iron ore arrivals in China totalled 784 million tonnes, down 2.4% from 803.34 million tonnes in the same period the previous year.

* Imported iron ore stocked at Chinese ports were steady at 129.95 million tonnes as of Oct. 14, SteelHome data showed. That was the highest since mid-May 2019.

* The most-traded construction steel rebar on the Shanghai Futures Exchange edged up 0.5% to 3,416 yuan a tonne.

* Hot-rolled steel coil, used in cars and home appliances, was little changed at 3,371 yuan a tonne.

* Stainless steel was 0.2% higher at 15,770 yuan a tonne.

* Dalian coking coal inched up 0.2% to 1,249.50 yuan a tonne and Dalian coke rose 0.9% to 1,872 yuan.

($1 = 7.0766 yuan)

Reporting by Enrico dela Cruz, Editing by Sherry Jacob-Phillips

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