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China Ferrous Futures Slip on Oversupply Concerns

BEIJING, Dec 28 (Reuters) - Chinese ferrous futures fell on Tuesday with raw material prices closing more than 3% lower, while steel rebar and hot rolled coils also declined on worries about oversupply as mills resume production in the coming months.

The market was concerned that a recovery in consumption may not match a quick resumption of steel production, CITIC Futures analysts wrote in a note, after authorities quelled rumours of any impending massive shutdown of industrial firms in the northern part of the country.

The government also recently reiterated it would promote healthy development of the property market, reinforcing its stance that "housing is for living, not for speculation", raising concerns on medium- to long- term demand for industrial metals. 

The most-traded iron ore futures on the Dalian Commodity Exchange for May delivery closed 3.4% lower at 674 yuan ($105.81) per tonne.

Spot prices of iron ore with 62% iron content for delivery to China fell $1 to $126.5 a tonne on Monday, according to SteelHome consultancy.

Dalian coking coal futures plunged 3.3% to 2,166 yuan per tonne and coke prices dived 4.4% to 2,895 yuan a tonne, slumping as much as 5.9% and 4.7% respectively, earlier during the session.

Steel rebar for construction use on the Shanghai Futures Exchange slipped 1.5% to 4,319 yuan per tonne.

Hot rolled coils on the Shanghai bourse, used in the manufacturing sector, ended down 0.8% at 4,442 yuan a tonne.

Shanghai stainless steel futures inched 0.3% higher to 16,905 yuan per tonne.

($1 = 6.3701 Chinese yuan)

Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Vinay Dwivedi

Source: Reuters

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