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China iron ore futures post biggest daily loss in 2-1/2 months
[SHANGHAI] China's iron ore futures fell on Wednesday, the first trading day after the Lunar New Year holiday, posting their worst session in more than two months due to a lack of buying interest from steel mills in the world's top consumer.
Iron ore prices are expected to remain stagnant over the next few weeks until the construction season begins at the end of March, analysts said.
"The market is still in an 'off' mode now as Chinese buyers have not yet come back," said Xu Huimin, an analyst with Huatai Great Wall Futures in Shanghai.
"The strong momentum ahead of the holiday was not sustainable. The steel demand recovery won't probably happen unless the government rolls out more policy easing and approves more infrastructure projects," she said.
Activity in China's mammoth factory sector edged up to a four-month high in February but export orders shrank at their fastest rate in 20 months, a private survey showed, painting a murky outlook that argues for more policy support.
The flash HSBC/Markit Purchasing Managers' Index (PMI) inched up to 50.1 in February, a whisker above the 50 level that separates growth in activity from contraction.
Iron ore futures for May delivery on the Dalian Commodity Exchange were down 2.4 per cent at 479 yuan (US$77), posting their worst day since Dec 9 and down 5.1 per cent so far in the year.
The most traded May rebar contract on the Shanghai Futures Exchange was down 1.3 per cent at 2,483 yuan. The price has fallen 4.2 per cent so far this year.
Two cargoes of 90,000 tonnes Australian fines with 62 per cent grade were sold at US$61 a tonne for April delivery on Wednesday, down from US$62 on Feb 18 at the start of China's holiday, traders said.