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China iron ore futures decline on sluggish pre-holiday downstream consumption

BEIJING, Jan 28 (Reuters) - Chinese iron ore futures fell 2% on Thursday, hitting their lowest level in more than two weeks, as weak pre-holiday downstream steel consumption and a government call for less steel output this year weighed on the steelmaking raw material.

The China Iron and Steel Association said the country’s steel imports will continue to rise in 2021, and encourages purchases of primary steel products to mitigate the effect of less crude steel production this year that the government has urged.

The association also suggested the government to improve related policies to ease China’s reliance on imports of steelmaking ingredients like iron ore.

The most-traded iron ore futures contract on the Dalian Commodity Exchange, for May delivery, fell 1.8% to 1,017 yuan ($156.95) per tonne by 0236 GMT. Earlier in the session, it fell as much as 2% to 1,014 yuan.

Spot 62% iron ore for delivery to China SH-CCN-IRNOR62 was unchanged at $167.5 per tonne on Wednesday from the previous session, according to SteelHome consultancy.

Construction rebar on the Shanghai Futures Exchange dipped 0.5% to 4,327 yuan a tonne ahead of the Chinese New Year holiday.

Hot rolled coil futures inched down 0.2% to 4,480 yuan a tonne.

FUNDAMENTALS

* Dalian coking coal inched 0.1% lower to 1,582 yuan a tonne.

* Dalian coke dropped 0.8% to 2,624 yuan per tonne.

* Stainless steel futures declined 1.5% to 14,220 yuan a tonne.

* The Dalian exchange has added new deliverable brands for its benchmark iron ore futures, while adjusting premiums and discounts for existing deliverable brands.

* Fortescue Metals Group reported a 4.7% jump in iron ore shipments in the second quarter from the first, in line with forecasts, as global miners benefit from soaring demand in top steel producer China.

$1 = 6.4798 Chinese yuan Reporting by Min Zhang and Shivani Singh; Editing by Subhranshu Sahu

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