By Manolo Serapio Jr
MANILA (Reuters) - Chinese steel futures slumped to their weakest since November on Friday after steel and metals associations in China called on Beijing to retaliate against the United States for slapping hefty tariffs on steel and aluminium imports.
Steelmaking ingredients - iron ore and coke - were also sold off, each dropping about 5 percent.
The Chinese steel and metals industry groups appealed to their government "to take resolute measures against imports of some U.S. products" after U.S. President Donald Trump set a 25 percent tariff on steel and 10 percent on aluminium to counter cheap imports, especially from China.
The most-active rebar on the Shanghai Futures Exchange fell as much as 4.9 percent to 3,663 yuan ($578) a tonne, its weakest since Nov. 20. It closed down 3.7 percent at 3,709 yuan.
Trump's move risks setting off a global trade war that could see other countries responding with similar trade barriers on products that may hit the U.S. economy, analysts say.
Apart from trade tensions with the United States, Argonaut's Lau said there are worries over Chinese steel demand.
"People are also jittery about demand after March," said Lau. "Inventory has built up quite fast and after March a lot of construction activity will resume, so if demand is slower than expectations, there will be further pressure on prices."
Inventories of construction steel product reached 7.13 million tonnes on Feb. 23, the most since March last year, data compiled by SteelHome consultancy showed.
Along with steel, the most-traded May iron ore on the Dalian Commodity Exchange lost 5.2 percent to end at 483.50 yuan a tonne, after hitting 481 yuan, its lowest since Nov. 20.
Amid slow demand, stocks of iron ore at China's major ports reached a record high 159.1 million tonnes on March 2, SteelHome data showed.
Coking coal futures dropped 3.1 percent and coke fell 4.7 percent.
($1 = 6.3406 Chinese yuan)
(Reporting by Manolo Serapio Jr., Editing by Joseph Radford and Sherry Jacob-Phillips)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)