News: UPDATE 1-China iron ore futures fall to near 3-month lows on virus fears

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    • Dalian iron ore ends down 2.6%; spot prices slump
    • Steel futures recover from Monday's selloff
    • Top steelmaking city Tangshan issues smog alert

    (Updates with closing prices, chart)

    Iron ore futures in China fell to their lowest level in nearly three months on Tuesday, as worries mounted over the economic impact of a coronavirus outbreak, but benchmark steel futures rose after the previous session's selloff.

    The Dalian Commodity Exchange's most-traded iron ore contract DCIOcv1 slumped as much as 6.1% to 569.50 yuan ($81.12) a tonne, its lowest since Nov. 12, before closing down 2.6%.

    Spot prices of the key steelmaking raw material have also declined, with a delay in resumption of construction activities after the Lunar New Year break amid the virus outbreak.

    The benchmark 62% iron-content ore for delivery to China settled at $83.80 a tonne on Monday, down 13.4% from $96.80 on Jan. 22, and the lowest since Nov. 15, based on data tracked by SteelHome consultancy SH-CCN-IRNOR62 .

    The coronavirus has killed 425 people in China, mostly in Hubei province - the epicentre of the outbreak - and two others overseas, with the total number of infections topping 20,500 persons.

    Hubei is China's sixth-largest steel-producing province, accounting for 4% of the country's 2019 crude steel production, according to metals consultancy CRU.

    Extended holidays and travel curbs due to the virus outbreak have kept many factories shut in China.

    "The coronavirus could potentially impact the annual level of world trade in 2020, as it's not certain that factories and logistics will be able to catch up and fully compensate for earlier delays, given the limited capacity," ING economists Timme Spakman and Rico Luman wrote in a note.

    "If they cannot fully recuperate, global trade growth in 2020 will suffer."

    China, the world's to importer of iron ore, produces half of the world's steel supply.


    • The virus outbreak may slow manufacturing activities in automobile and other sectors, and possibly reduce steel product demand, an executive of Japanese trading house Mitsui & Co Ltd 8031.T said.
    • Iron ore exports by Brazil, one of China's two biggest suppliers, rose 8.4% month-on-month in January, but fell 19.3% year-on-year.
    • Steel prices on the Shanghai Futures Exchange (ShFE) rose on expectations of more government measures to offset the economic fallout from the epidemic.
    • China's top steelmaking city of Tangshan has issued a second-level heavy pollution alert, which may prompt mills to curb output, reducing demand for raw materials.
    • ShFE's most-traded construction steel rebar contract SRBcv1 rose 1.6%, while hot-rolled coil SHHCcv1 jumped 1.4%.
    • Stainless steel SHSSc1 slipped 0.1%.
    • Other ferrous raw materials also rebounded, with coking coal DJMcv1 up 1.5%, while coke DCJcv1 gained 0.9%.
    Spot iron ore prices plummet after Lunar New Year holiday 
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