Related News

Home » Business » Finance

Price of iron core and coal futures falls to a 6-month low

IRON ore and coal futures prices in China plunged to a six-month low today amid outflow of capitals on fear of weakening domestic demands.

The most traded iron core futures contract for September delivery tumbled 7.41 percent to 462 yuan (US$70) per ton, while coking coal for September delivery faltered 4.85 percent to 1,020 yuan per ton today, both diving to the lowest level since October last year.

Iron ore has been leading China’s commodity price drop since February as the domestic steel industry suffered excessive supply while demand turned feeble, said Wang Guoqing, research director at Lange Steel Information Center, a domestic steel industry consultancy.

The output of crude steel grew 4.6 percent annually to 201.1 million tons during the first quarter, but demand waned due to slowdown of property development and less car sales in the period.

Coking coal, a raw material to refine steel, also saw price declines as investors expect steel plants to slow production in the coming months and cut a glut of capacity, which would reduce the demand for coal, Wang said.

Futures traders have been “selling short” on the shrinking commodity demand led by steel industry, which in turn pulled down the prices further, said Qin Haiyin, a Guangzhou-based futures analyst.

Trading volume at China’s futures market totaled 55.3 trillion yuan from January to April, down 18.68 percent from a year prior, according to China Futures Association.

But in the longer term, the price will stabilize based on the sustained demand for infrastructure construction in China, Wang said.

The Shanghai stock market fell 0.78 percent today led by coal firms, echoing the rout at commodity futures market.

Yanzhou Coal Mining Co dropped 5.79 percent to 11.23 yuan, while Shaanxi Coal Industry Co lost 4.5 percent to 5.52 yuan.

The Shanghai Composite Index lost 1.64 percent this week on fear of shrinking industrial profit as hurt by the commodity fluctuations, said Guangdong Development Fund.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend