July 19, 2019 / 8:20 AM / 4 months ago

UPDATE 1-Shanghai steel rebar extends losses on tepid demand

* Hot-rolled coil posts first weekly rise in July

* Iron ore benchmark posts sixth straight weekly rise

* Iron ore trade volumes drop after DCE fees hiked (Updates with closing prices, graphic)

By Enrico Dela Cruz

MANILA, July 19 (Reuters) - China’s rebar benchmark edged lower on Friday, extending losses into a third session amid seasonally slow demand for the construction material in the world’s top steel producer and consumer, though it posted its first weekly gain for the month.

Iron ore prices rose but trade volumes were thin after China’s Dalian Commodity Exchange (DCE) raised transaction fees for all iron ore futures contracts, starting Thursday.

The most-actively traded October rebar contract on the Shanghai Futures Exchange slipped 0.3% to 4,001 yuan ($582.08) a tonne. It rose 0.2% from last week.

Hot-rolled steel, used in cars and home appliances, edged up 0.2% to 3,904 yuan a tonne, and rose 1.3% on the week, rebounding after two successive weekly declines.

Overall short-term macroeconomic conditions in China remain “bearish”, according to commodities broker Marex Spectron.

“We continue to pick up weakness in manufacturing and construction activity, which should mean steel demand will come under pressure,” said Marex analyst Hui Heng Tan in Singapore. “We are bearish on current demand conditions (for iron ore).”

Demand for rebar in China is usually sluggish during summer months from June to August when high temperature and continuous rainfall hamper construction activities.

The most-actively traded DCE iron ore contract, for September delivery, jumped 2.4% to 916 yuan a tonne in late trade, and rose for a sixth straight week.

The iron ore benchmark, which hit a record-high 924.50 yuan a tonne on Tuesday, has more than doubled this year amid supply outages in top exporters Australia and Brazil, and robust demand in China - the world’s top steel producer and consumer.


* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 was down 1.2% at $121.50 a tonne on Thursday, but still hovering near the five-and-a-half-year high of $126.50 hit on July 3, data tracked by SteelHome consultancy showed.

* Signs have emerged that stability is starting to return to the iron ore market, said Reuters columnist Clyde Russell, citing the latest production numbers from two of the world’s top three miners - Rio Tinto and BHP Group.

* The Baltic index, which tracks rates for ships ferrying dry bulk commodities, on Thursday extended gains for an eighth straight session, mainly driven by strong demand for vessels that ship iron ore from Brazil into China.

* Other steelmaking ingredients traded mixed, with coking coal up 0.4% at 1,418 yuan a tonne, while coke slipped 0.5% to 2,187 yuan.

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($1 = 6.8736 yuan)

Reporting by Enrico dela Cruz; Editing by Richard Pullin and Sherry Jacob-Phillips

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