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Iron-ore prices tumbled more than 6% on
Monday, with the Dalian benchmark hitting its lowest in seven months, on rising
portside stocks of the steelmaking ingredient in China due to increased
shipments and weak domestic demand.
The most-traded iron-ore for January
delivery on China's Dalian Commodity Exchange dropped as much as 6.8% to 722
yuan ($111.88) a tonne, its weakest since February 4, before ending daytime
trading at 723 yuan.
Iron-ore's most-active October contract on
the Singapore Exchange sank 8.3% at $131.10 a tonne by 0725 GMT.
Imported iron ore stocked at ports in
China, the world's top steel producer, climbed to 131.40-million tonnes last
week, the highest since end-April, SteelHome consultancy data showed.
Spot iron-ore in China tumbled to a
two-week low of $145.50 a tonne on Friday, SteelHome data showed.
Iron-ore prices have fallen under the
weight of "a monstrous four-million tonne" increase in weekly
shipment from Australia in the last week of August, said Navigate Commodities
MD Atilla Widnell.
Chinese iron-ore producers' plan to
increase their domestic output by more than 100-million tonnes between 2021 and
2025 also added some pressure on prices, he said.
Some industry data showing China's weekly
steel output had increased may have also prompted the continued iron ore
sell-off, Widnell said.
"Increasing steel output occasionally
has a counter-intuitive effect on iron ore prices given that retail investors
sell the feedstock as they expect steel margins to compress," he said.
In sharp contrast, other steelmaking
ingredients extended their record-setting rallies on supply concerns. Dalian
coking coal soared 7.7% to a life-high 2 818 yuan a tonne, before closing at 2
778 yuan, while coke climbed 4.5%.
Rebar on the Shanghai Futures Exchange rose
1.7%, while hot-rolled coil gained 1.8%. Stainless steel hit its 7% upside
limit, closing at a five-week peak of 19,585 yuan a tonne.