China steelmaking ingredients fall as utilisation rates slip for 7th week

Chinese steelmaking raw materials dropped on Friday, with iron ore and coking coal futures down more than 5% at one point, as production at steel mills stayed sluggish amid government curbs. 

Capacity utilisation rates of blast furnaces at 247 steel firms across China declined for the seventh straight week and stood at 74.8% as of Friday, down from 75.2% a week earlier, according to Mysteel consultancy. 

Benchmark iron ore futures on the Dalian Commodity Exchange , for May delivery, were down 3.6% to 603 yuan ($94.61), as of 0330 GMT, after declining as much as 5.5% in morning trade. For the week, however, the contract was on course for a 4.8% gain. 

Spot prices of iron ore with 62% iron content for delivery to China fell $1 to $104.5 a tonne on Thursday, data compiled by SteelHome consultancy showed. 

Dalian coking coal futures were 2.1% lower at 1,925 yuan a tonne, after falling more than 6.5% earlier in the day. 

Coke prices slipped 0.6% to 2,765 yuan per tonne. 

Steel prices on the Shanghai Futures Exchange were mixed. 

Construction rebar inched up 0.9% to 4,336 yuan per tonne and hot rolled coils rose 0.9% to 4,738 yuan a tonne.  Stainless steel futures on the Shanghai bourse, for January delivery, fell 1.7% to 16,690 yuan per tonne. 

"Impact from changes to the supply side on steel products prices is weakening," SinoSteel Futures wrote in a note, referring to output controls during winter. 

However, with the real estate market remaining weak, steel prices are not expected to gain significantly, SinoSteel Futures said.