Reuters reported that China steel futures fell more than 1% on Monday after data showed the manufacturing sector in the world top steel consumer continues to struggle, suggesting a near-term recovery in demand is unlikely.

The most traded rebar for January delivery on the Shanghai Futures Exchange dropped 1.1% to CNY 3,374 per tonne by the midday break. It hit a session trough of CNY 3,356 not far off the all time low of CNY 3,327 reached last week.

An iron ore trader in Shanghai said "It's hard to see any recovery for the steel and iron ore markets when every bit of Chinese data only makes people more pessimistic about the economic situation."

Another Shanghai based trader said "The price stabilised on Friday but during the weekend we saw a further drop in spot steel prices, so I think iron ore may dip further this week. The price of steel billet in China's key Tangshan area dropped about CNY 40 to CNY 2,940 per tonne at the weekend.”

A slowdown in China economic growth has slashed the country demand for steel and raw material iron ore, and traders say unless Beijing drives up demand with more monetary stimulus, prices are unlikely to recover.

Source - Reuters

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