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The the most-traded January contract on the Dalian Futures Exchange ended the morning session at 622 yuan ($100) per tonne, down from 627 yuan ($102) per tonne. This was the lowest level for the January contract since it started trading.
The Shanghai Futures Exchange rebar contract slipped back to close the morning session at 2,925 yuan ($474), down 18 yuan ($3) from its open. It hit a record low of 2,919 yuan ($473) per tonne in the morning.
"I think there is more downside to go," a trader in Singapore said. "Physical demand looks extremely weak and steel mills are slowing down their crude steel production."
Over the weekend, the Chinese government released its latest official purchasing managers’ index (PMI) for August, which again showed a softening of economic activity. The index came in at 51.1, down from 51.7 in July.
Analysts said the details of the PMI figure showed the slowdown was more pronounced in domestic-focused businesses, particularly in the property sector that is critical for steel demand.
Iron ore market participants will be nervous about what’s ahead for pricing this week, after an already extended slump in recent weeks amid bearish sentiment on both demand and supply. Metal Bulletin’s Iron Ore Index closed last week at $87.62, its lowest level since October 21, 2009.
On Monday morning, leading longs producer Shagang slashed its ex-works prices for rebar, in another new bearish indicator for the market.
Iron ore futures on the Dalian Commodities Exchange slumped during the morning on Monday September 1 after China published weaker official manufacturing data and rebar futures slumped to a record low.