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Iron ore set for worst month since May as rout extends
[SHANGHAI] Spot iron ore is set to post its biggest monthly fall since May last year as a glut kept the steelmaking commodity at its weakest since 2009.
Iron ore futures in China traded little changed with investors waiting for stronger signals that would point to a pick-up in Chinese steel demand.
"Some investors switched to long positions in the past two days as they expected investment in infrastructure projects could pick up this year, but the gains could not be sustained," said Li Yajing, a Guangzhou-based analyst at Guangyong Futures.
China plans to spend a further 800 billion yuan (US$128.01 billion) on building railway tracks this year after exceeding its 2014 investment target, local media reported on Thursday.
Steel demand in China's northern regions slows down during winter along with construction activity and some analysts warn the weakness could persist throughout the year as the economy slows further.
China plans to cut its growth target to around 7 per cent in 2015, its lowest goal in 11 years, sources said.
Benchmark 62 per cent grade iron ore for immediate delivery to China fell 0.6 per cent to US$62.30 a tonne on Thursday, its lowest since May 2009, according to data compiled by The Steel Index.
Iron ore lost 12.5 per cent in January, stretching a 47 per cent drop in all of 2014.
The most-active iron ore contract for May delivery on the Dalian Commodity Exchange closed unchanged at 474 yuan a tonne. It fell 1.3 per cent this week, the third consecutive weekly loss. For the month, it lost 6.7 per cent.
The most-traded May rebar contract on the Shanghai Futures Exchange closed up 0.1 per cent at 2,498 yuan. It rose for the first week after a three-week losing run, while it still posted the biggest monthly loss since September 2014.
The March iron ore contract on the Singapore Exchange fell 1.1 per cent to US$61.88 a tonne.