Selloff in China steel futures continued on Wednesday amid mounting fears over the spread of a new coronavirus in the country and as market participants headed for the exit ahead of the Lunar New Year holiday.
The Shanghai Futures Exchange’s most-traded construction steel rebar contract slumped as much as 1.9 percent to 3,506 yuan ($508.11) per ton, the lowest since Dec. 26 last year.
It ended the morning session down 1.5 percent.
Hot-rolled steel coil, used in cars and home appliances, dropped as much as 2.2 percent to 3,519 yuan a ton, also the weakest since Dec. 26, and was down 1.9 percent by lunch break.
“People are becoming increasingly worried about this virus outbreak, which may disrupt many businesses,” said Richard Lu, senior analyst at commodity consultant CRU Group’s Beijing office.
Chinese stocks also extended losses on fears of the contagion, particularly as millions of Chinese people travel for Lunar New Year festivities starting this week. Cases of infection have ballooned to 440 across the country, with the death toll rising to nine.
The virus has spread from central Chinese city of Wuhan to other cities, including Beijing and Shanghai, as well as the United States, Thailand, South Korea, Japan and Taiwan.
The potential business disruptions could mean less demand for steel and steelmaking ingredients. Dalian and Singapore iron ore futures fell. – Reuters
