Shanghai steel futures fell to their lowest in two weeks on October 8, reflecting worries about demand and excessive supply in China, while Dalian iron ore rose on the first trading day after the week-long National Day break.
The most-traded construction steel rebar contract on the Shanghai Futures Exchange, for January 2020 delivery, fell as much as 2.4% to 3,402 yuan/t ($477.43/t), the benchmark contract's weakest level since September 23.
Hot-rolled steel coil, used in cars and home appliances, fell as much as 2% to 3,410 yuan/t, also the lowest since September 23, and was at 3,443 yuan/t at the mid-day break.
Despite its trade war with the United States, China's steel output is forecast to grow around 7% this year.
Steel sales in China, however, have softened as growth in the machinery sector reversed and started to slow, while the offset from infrastructure has not been sufficient, analysts said.
Steel futures prices slumped despite plans by some Chinese steel mills to push prices higher in the coming days, according to a Shanghai-based trader.
Stainless steel was down 0.4% to 15,640 yuan/t at the break.
The most-traded iron ore on the Dalian Commodity Exchange climbed as much as 2.1% to 665.5 yuan/t, erasing an earlier decline.
Demand for iron ore in China may pick up as steel production controls imposed ahead of the National Day holidays may be relaxed, while a drop in shipments of the raw material from Brazil in recent weeks may also provide support to prices.
Spot iron ore benchmark was settled at $94/t before the holidays.
China's smog-prone northern city of Tangshan has issued new guidelines to punish and prosecute companies and individuals found guilty of pollution offences, amid warnings it might miss its air quality goals for this year.
Dalian coking coal rose 1.3% to 1,258 yuan/t while coke edged up 0.2% to 1,888 yuan/t.
(Writing by Tian Zhang Editing by Harry Huo)
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