Spot iron ore, rebar extend losses in China

Spot ore prices fell around $165/t in China on Tuesday, pulling down key indexes to more than 13-month lows, with Shanghai rebar futures also falling to a fresh contract low on demand concerns.

SHANGHAI (Reuters) -

Spot iron ore prices in the world's top consumer China continued to fall on Tuesday, dragging down key indexes to more than 13-month lows, and Shanghai rebar futures also tumbled to a fresh contract low on demand concerns.

Iron ore prices for 63/63.5-percent Fe grade fell to around $165 per tonne, including freight, on Tuesday, down 8 percent, or $15 from over a week ago, industry consultancy Umetal.com said, stressing widespread worries over steel demand in China.

"The overall market is in panic as small mills have started to shut down some blast furnaces, while big ones are relying on their existing iron ore inventories and reduced buying," said an iron ore trader in the coastal city of Dalian.

China's annual economic growth slipped to 9.1 percent in the third quarter from 9.5 percent in the previous quarter, as tight domestic monetary policy and easing foreign demand crimped activity.

"Tight policy is not expected to be loosened by year-end, and weakness in the steel market may last, at least until early next year," the trader added.

Shanghai most-active January rebar futures hit a fresh contract low at 4,112 yuan ($645) per tonne on Tuesday, before ending 1 percent lower by the midday close.

China's crude steel production in September fell to its lowest point in seven months, down 3.5 percent from August to 56.7 million tonnes, data from the country's statistics bureau showed.

Chinese steel mills have suffered declining margins as steel prices in September, tradtionally the peak consumption season, have posted a downward trend as Beijing's tightening measures to curb inflation continued to hit steel demand.

Major global iron ore indexes, tracking spot prices in China, sagged to their lowest in more than 13 months.

Platts index for 62-percent Fe grade IODBZ00-PLT slumped $5 to $152.25 per tonne on Monday, its lowest since Nov. 2, 2010. The Steel Index IO62-CNI=SI for the same grade sagged $4.1 to $153.4 per tonne on Monday, its lowest since Nov. 5, 2010.