Steel making raw materials hit multi-week lows in China on trade woes
MANILA, July 5 (Reuters) – Prices of steel making raw materials dropped to multi-week lows on Thursday as a festering trade row between China and the United States kept risk appetite low.
Steel prices were steady, drawing some support from the news that China's top steelmaking city of Tangshan ordered steel companies to meet ultra-low emissions targets, its latest effort to curb air pollution.
Base metals futures in China also sank and Asian stocks dropped for a fourth day with investors on edge on the eve of a U.S. deadline to impose tariffs on Chinese imports.
The United States is "opening fire" on the world with its threatened tariffs, China warned, saying it will respond the instant U.S. measures go into effect and ramping up the rhetoric in a bitter trade dispute.
Steel mills in Tangshan will be given until October to meet the stricter emissions target, while coke producers and coal-fired power plants will have to meet them by September.
The Trump administration's tariffs on $34 billion of Chinese imports are due to go into effect at 0401 GMT on Friday, just after midday in Beijing.
"With no signs of any agreement, and an escalation of negative moves and unhelpful rhetoric, the world could be heading towards a damaging round of self-inflicted economic injuries," said Michael McCarthy, chief market strategist at CMC Markets and Stockbroking.
The most-traded September iron ore contract on the Dalian Commodity Exchange closed down 1.3 percent at 456.50 yuan ($69) a tonne, after falling as far as 452 yuan earlier, a two-week low.
Coking coal dropped as much as 2.5 percent to a 2-1/2-month low of 1,134 yuan a tonne, before settling at 1,150.50 yuan, down 1.1 percent. Coke slid by up to 2.4 percent to a one-month trough of 1,990 yuan, ending at 2,012 yuan, 1.4 percent lower from Wednesday.
On the Shanghai Futures Exchange, the most-active October rebar gained 0.1 percent to 3,788 yuan per tonne.
Steel mills in Tangshan will be given until October to meet the stricter emissions target, while coke producers and coal-fired power plants will have to meet them by September, according to a document issued by the Tangshan city government on Wednesday and reviewed by Reuters.
Tangshan, a city in northern Hebei province, accounts for 11 percent of China's total steel output. Separately, Hebei, China's biggest steel producing region, said it plans to slash steel capacity by 50 percent in some of its major cities by 2020.
Spot iron ore for delivery to China's Qingdao port <.IO62-CNO=MB> slipped 0.5 percent to $64.20 a tonne on Wednesday, the lowest since May 28, according to Metal Bulletin. ($1 = 6.6359 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Amrutha Gayathri)