August 9, 2019 / 2:39 AM / 3 months ago

China iron ore set for biggest weekly drop in over 16 months

* Dalian iron ore set to lose 12.4% this week

* Benchmark Shanghai rebar futures down 2.5% on Friday

BEIJING, Aug 9 (Reuters) - China’s iron ore futures were on course for their biggest weekly drop since March 2018 on Friday, slumping for the seventh straight day, amid stabilising supply from major miners.

The most-traded iron ore contract on the Dalian Commodity Exchange, for January 2020 delivery, fell 3% to 644 yuan ($91.36) per tonne as of 0230 GMT and was in line for a weekly loss of 12.4%, the most since the week ended March 23, 2018. It had closed down 2.7% on Thursday.

“Iron ore prices are actually stabilising after the big drop on Wednesday,” said Zhuo Guiqiu, analyst from Jinrui Futures, adding that the estimated average cost of production for domestic mines was at around 580-600 yuan per tonne, meaning “there’s not much space for another big decline.”

China’s iron ore imports surged 21% to 91.02 million tonnes in July from the previous month, the highest level since January, boosted by growing shipments from Australia and Brazil.

Meanwhile, the most-active October construction steel rebar on the Shanghai Futures Exchange fell 2.7% in morning trade to 3,613 yuan per tonne.

Steel inventories in China stood at 12.99 million tonnes as of Aug. 8, up 1.16 million tonnes, compared with a month earlier, according to data compiled by consultancy Mysteel.

FUNDAMENTALS

* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 finished at $94.50 a tonne on Thursday, based on SteelHome data.

* Hot-rolled steel, used in cars and home appliances, slipped 1.9% to 3,602 yuan a tonne.

* Other steelmaking materials were mixed, with Dalian coking coal rising 0.5% to 1,411 yuan, while coke fell 3.9% at 1,944 yuan a tonne.

* Utilisation rates at China’s steel mills across the country averaged 69.48% this week, up from 67.27% a week ago, according to Mysteel.

* For the top stories metals and other news, click or ($1 = 7.0494 Chinese yuan renminbi) (Reporting by Min Zhang and Tom Daly in Beijing and Enrico Dela Cruz in Manila; Editing by Rashmi Aich)

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