China iron ore, steel futures tumble as virus fears escalate
[MANILA] China's iron ore and steel futures fell by their daily limits on Monday on fears that a rapidly spreading virus outbreak could curb demand and deliver a sharp blow to the economy.
The death toll from the virus and the number of confirmed cases has risen sharply since the country's financial markets began a long Chinese New Year holiday on Jan 24. The break was extended until Monday in an attempt to curb the spread of the outbreak.
The virus has killed 350 people so far in Hubei province, the epicentre of the outbreak, prompting travel restrictions in large parts of the country.
The fallout has raised concerns that a slowdown in the world's second-largest economy and top metals consumer could worsen.
The Dalian Commodity Exchange's most-traded iron ore contract, expiring in May, slid as much as 8 per cent - the maximum amount by which the price is allowed to drop for the day - to 606.5 yuan (US$87.85) a tonne. That's the lowest since Dec 2 last year.
On the Shanghai Futures Exchange, the most-active construction steel rebar contract, also expiring in May, shed 8 per cent to 3,233 yuan a tonne, the weakest since Nov 12 last year.
Shanghai hot-rolled steel coil futures slumped as much as 8 per cent to 3,246 yuan a tonne, the lowest since Nov 14 last year.
FUNDAMENTALS
- Other ferrous raw materials also dropped, with Dalian coking coal falling as much as 4.9 per cent, while Dalian coke lost up to 5.7 per cent.
- Shanghai stainless steel futures slid 7.3 per cent.
- Public transport in Tangshan, China's largest steelmaking city in northern Hebei province, has been suspended since Jan 28 to prevent the further spread of the virus.
- China's factory activity expanded at its slowest pace in five months in January, even as the virus outbreak added to risks facing the world's second-largest economy, a private survey showed.
REUTERS
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