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China iron ore extends losses after steeper fees hit steel
Reuters Reuters
Sunday August 13, 2017 10:28 PM
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* Shanghai exchange hikes transaction fees on rebar futures
* Weaker restocking demand also weighed on iron ore prices - CBA
By Manolo Serapio Jr
MANILA, Aug 14 (Reuters) - Chinese iron ore futures dropped more than 2 percent on Monday, adding to the previous session's steep losses, as steel prices extended declines after the Shanghai exchange increased transaction fees to fight speculative trading.
The higher fees followed a rally in rebar futures last week to their highest since 2013 amid strong volumes, which the China Iron and Steel Association said was largely driven by speculative investors. The most-traded iron ore for January delivery on the Dalian Commodity Exchange was down 2.7 percent at 536 yuan ($81) a tonne, as of 0221 GMT.
Iron ore has largely tracked the movement in steel prices, dropping nearly 5 percent on Friday as rebar steel futures fell 2.7 percent just before the Shanghai Futures Exchange hiked fees.
The bourse also said it would limit intraday positions for non-member firms and clients on rebar futures contracts for delivery in October and January from Aug. 15. The most-active January rebar in Shanghai slipped as much as 3.1 percent to 3,786 yuan per tonne, its lowest in a week.
ANZ senior commodity strategist Daniel Hynes said news of increased trading charges on the Shanghai Futures Exchange "weighed on investor appetite".
"Weaker restocking demand also prompted iron ore prices lower," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
The drop in prices of the steelmaking raw material came despite a fall in iron ore stockpiles at China's ports last week.
Iron ore inventory at China's major ports stood at 137 million tonnes on Friday, down 2.15 million tonnes from the prior week, according to data tracked by SteelHome consultancy. Port stocks reached a record 141.45 million tonnes in June.
Iron ore for delivery to China's Qingdao port fell 1.9 percent to $75.19 a tonne on Friday, according to Metal Bulletin, a day after hitting a four-month high.
China's crude steel output rose 10.3 percent from a year ago to a record 74.02 million tonnes in July, government data showed. ($1 = 6.6576 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Sherry Jacob-Phillips)