China steel prices fell sharply in early trade on Wednesday, losing ground for a third session in a row as the country’s manufacturing sector posted its weakest growth in more than two years and amid concerns that escalating Sino-U.S. trade tensions will curb metals demand.

The most active steel rebar contract on the Shanghai Futures Exchange, for January delivery, was down 1.1 percent at 4,132 yuan ($593.26) a tonne as of 0158 GMT, after hitting a one-week low of 4,114 yuan earlier in the session.

Hot-rolled steel coil futures also declined, shedding as much as 2.9 percent to 3,751 yuan a tonne, the weakest since July 9.

“The risk-off tone amid an escalation in trade tension will likely see pressure remain on commodity prices,” ANZ said in a note.

Growth in China’s manufacturing sector cooled for the second straight month in October, suggesting a further loss of momentum in the world’s second-biggest economy as it faces rising headwinds from the Sino-U.S. trade row.

The PMI fell to 50.2 in October from 50.8 in September, only slightly above the 50-point mark that separates growth from contraction for the 27th straight month. Analysts surveyed by Reuters had forecast the reading would ease slightly to 50.6.

Among steelmaking raw materials, iron ore futures on the Dalian Commodity Exchange fell as much as 1.8 percent to 528.5 yuan a tonne, extending falls into a second session after it hit a seven-month high on Monday.

Dalian coke futures slipped 0.8 percent, while coking coal lost 1 percent.

 

Source: reuters.com

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