Benchmark steel futures extend losses while Dalian iron ore edges up 0.7 percent

China’s benchmark construction steel futures extended losses into a fifth session on Thursday, with lukewarm demand in spot markets continuing to weigh on sentiment.

The most-traded steel rebar contract for October delivery on the Shanghai Futures Exchange had dipped 0.3 percent to 3,583 yuan ($552.95) a ton by 5pm on Thursday.

“Prices of physical steel products have fallen sharply amid waning trading volumes... which suppressed market sentiment and may keep steel prices at a low level,” analysts from CITIC Futures said in a note.

They also added that total trading volume across the country had been declining for four days.

Spot steel product prices fell 0.5 percent to 4,276.22 yuan a ton on Wednesday, a level not seen for nearly three weeks, according to data from consulting firm Mysteel consultancy.

Steelmaking raw materials continued to drop on Wednesday, alongside steel prices, with coke falling for a sixth day.

“Mills are not active in replenishing their stockpiles at the moment, as they plan to restock when prices fall further,” said a coke trader in East China’s Shandong Province. He declined to be identified as he was not authorized to speak with media.

The most-traded coke futures on the Dalian Commodity Exchange sank 0.7 percent to 1,971 yuan a ton after plunging as much as 4.8 percent in the previous session. Coking coal prices declined 0.8 percent to 1,181.5 yuan a ton.

Dalian iron ore futures rose for the first time in six sessions on Thursday, edging up 0.7 percent to 457.5 yuan a ton.

“Iron ore prices have already fallen to a low level... and the market thinks there is only limited room for prices to decline further,” said analysts at CITIC Futures.

Iron ore for delivery to China’s Qingdao port in Shandong Province fell for a fifth straight day on Wednesday.