June 24, 2020 / 3:49 AM / 2 months ago

China steel futures drift down as traders flag oversupply concerns

* Shanghai rebar, HRC futures edge down

* Dalian iron ore up 1.3% in early trade

* Spot 62% iron ore unchanged at $102.5 per tonne

BEIJING, June 24 (Reuters) - Steel rebar and hot-rolled coils (HRC) futures on the Shanghai Futures Exchange fell on Wednesday as rising steel production and lean demand from downstream users have raised worries about oversupply during the off-peak season.

The most traded construction steel rebar, for October delivery, was down 0.06% at 3,612 yuan ($511.08) per tonne, as of 0330 GMT.

Hot-rolled coils, mainly used in the manufacturing sector, fell 0.4% to 3,601 yuan a tonne.

Data compiled by consultancy Mysteel showed that weekly output of five main steel products, including rebar and HRC, continued to rise to 10.94 million tonnes, as of June 18, lifting concerns on increasing supply-and-demand contradiction amid softening demand.

“Current steel profit margins for long-processed steelmaking is at around 300-400 yuan per tonne, under which the supply is hard to drop dramatically,” Huatai Futures wrote in a note, adding that demand faces further downward risks due to weak construction activities.

Stainless steel futures on the Shanghai bourse, for August delivery, dropped 1% to 13,075 yuan a tonne.

FUNDAMENTALS

* Benchmark iron ore futures on the Dalian Commodity Exchange, for September delivery, rose 1.3% to 766 yuan a tonne.

* Dalian coking coal gained 0.3% to 1,187 yuan a tonne and coke edged down 0.1% to 1,948 yuan.

* Spot prices for iron ore with 62% iron content for delivery to China stood at $102.5 per tonne on Tuesday, unchanged from the previous session.

* India has imposed an anti-dumping duty on flat-rolled steel products that are plated or coated with alloy of aluminium and zinc originating in, or from China, Vietnam and South Korea, according to a government order issued on Tuesday.

$1 = 7.0674 Chinese yuan Reporting by Min Zhang and Tom Daly, Editing by Sherry Jacob-Phillips

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