China steel, iron ore futures dive as demand fears drive commodities selloff | Reuters

Chinese commodities futures fell almost across the board on Monday, led by 6 percent drops in steel and iron ore futures, as worries about waning demand in the world’s top consumer of most industrial materials extended last week’s slide.Speculative funds had rushed into China’s commodities futures last month, betting that the country’s economy was bottoming out, alarming exchanges and regulators who feared a new bubble was forming as volumes and prices soared.China’s three commodity exchanges have taken a string of aggressive measures, including raising trading margins, daily movement limits and transaction fees in a bit to limit speculation and cut trading volumes of futures from steel to eggs.The Dalian Commodity Exchange said on Monday it would continue to strengthen its market monitoring and may raise transaction fees further to curb risks from speculation.”Futures liquidity has dropped sharply following exchanges’ measures and now investors are worried that China’s economic trend will be weaker than previously expected, hurting sentiment,” said Zhao Chaoyue, an analyst at Merchant Futures in Shenzhen.The most-traded rebar on the Shanghai Futures Exchange posted its biggest daily fall on record on Monday, hitting a downside limit of 6 percent to 2,175 yuan ($334.41) a ton, the lowest since April 7.  September iron ore futures on the Dalian Commodity Exchange also tumbled by their daily permissible limit of 6 percent to 388 yuan a ton.Chinese customs data issued on Sunday showed that iron ore imports fell 2.2 percent from March to 83.92 million tonnes, while copper ore and concentrate imports shed 8 percent on the month to 1.26 million tonnes.China’s economic trend will be “L-shaped”, rather than “U-shaped”, and definitely not “V-shaped”, as structural reforms take time, while the government will not use excessive investment and credit to stimulate growth, the government-owned People’s Daily reported on Monday.

Source: China steel, iron ore futures dive as demand fears drive commodities selloff | Reuters

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