August 19, 2019 / 8:18 AM / a month ago

UPDATE 1-China iron ore sheds gains on prospects of steel output curbs

* Tangshan seen deepening steel output cuts for 4 days

* China iron ore port stocks hit highest since late-May

* China rate reforms seen cutting corporate borrowing costs (Recasts, updates with more comments and closing prices)

By Enrico Dela Cruz

MANILA, Aug 19 (Reuters) - Dalian iron ore futures gave up early gains and ended lower on Monday, with focus shifting to demand prospects clouded by steel production curbs in China, where port stockpiles of the steelmaking raw material climbed for a fifth week in a row.

The most-traded iron ore contract on the Dalian Commodity Exchange, with January 2020 expiry, ended down nearly 1% at 617 yuan ($87.57) a tonne, after gaining as much as 2.2% earlier in the session. That was its weakest finish since June 11.

The most-active September 2019 iron ore futures contract on the Singapore Exchange was down 0.8% at $86.10 a tonne in late trade, after rising as much as 1.8% earlier in the session.

Iron ore pulled back during afternoon trade amid market talk that China’s top steelmaking city of Tangshan has ordered deeper production cuts over a four-day period - Aug. 18-Aug. 21 - to curb pollution. Reuters could not immediately verify this.

Expectations that iron ore supply will further improve also weighed on prices.

“Forward supply conditions continue to get looser which, coupled with expected pick-up in inflows into China, are all price negative developments,” said Hui Heng Tan, analyst at commodities broker Marex Spectron.

Iron ore, along with other Asian steel benchmarks, rose earlier on Monday after China announced key interest rate reforms over the weekend, fuelling expectations of a reduction in corporate borrowing costs in the struggling economy.

FUNDAMENTALS

* The inventory of imported iron ore at Chinese ports was estimated at 123.15 million tonnes, as of Aug. 16, climbing for a fifth week to its highest since the last week of May, based on the latest data from SteelHome consultancy. SH-TOT-IRONINV

* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 was steady at $91.50 a tonne on Friday. It rebounded from its lowest in more than four months, hit early last week.

* The construction steel rebar index on the Shanghai Futures Exchange ended up 0.9% at 3,747 yuan a tonne. Hot-rolled coil, steel used in cars and home appliances, gained 0.5% to 3,745 yuan.

* “Our data analytics model for steel consumption across flat and long products are showing further strength ... starting from the third week of August until October,” said Darren Toh, a data scientist with Singapore-based steel and iron ore analytics firm Tivlon Technologies.

* Other steelmaking raw materials turned mixed, with Dalian coking coal up 0.6% at 1,338.50 yuan a tonne, while coke ended down 0.2% at 1,979.50 yuan.

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($1 = 7.0461 yuan)

Reporting by Enrico dela Cruz; Editing by Joseph Radford and Sherry Jacob-Phillips

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