Iron Ore-Shanghai rebar falls near record low; demand weak,Technology

 SHANGHAI, Aug 2 (Reuters) - Chinese steel futures extended
losses on Thursday to near a record low as a slowing economy in
the world's top steel producer and consumer crimped demand, with
traders expecting even lower prices in the next few weeks.
The most active January rebar contract on the Shanghai
Futures Exchange fell to a session low of 3,663 yuan
($580) per tonne, within sight of the record low of 3,652 yuan
it struck on July 23. The contract pared losses to 3,683 yuan by
the midday break.
"Demand for rebar is very poor and physical traders are not
able to find buyers at all," said Dai Xianghui, an analyst with
SDIC CGOG Futures in Beijing.
"I expect rebar prices to fall to 3,500 yuan in the coming
weeks. Some investors are looking at a much lower level."
Buyers have retreated from the market as construction
activities typically wind down in summer. The weak prices are
also unable to entice buyers who are sceptical that Beijing's
efforts to bolster the economy would give demand a strong enough
boost to help draw down swollen inventories.
Chinese steelmakers are producing at a loss of 300-400 yuan
per tonne in July, forcing a few mills to step up maintenance in
order to cut output, industry sources said. Large steel mills'
profits fell 95 percent in the first half from a year ago.
The uncertainties in steel prices will continue weighing on
iron ore, the key steelmaking raw material, as low prices will
force more loss-making mills to cut production.
Spot prices of iron ore cargoes to China inched up on
Wednesday to $117.40 a tonne due to higher offers, but few mills
were willing to buy at that price.
"A few mills, which kept their inventories at low levels,
have showed some buying interest, but they want lower prices so
actual transactions are not picking up at all," said an iron ore
trader in northern China.
Shanghai rebar futures and iron ore indexes at 0330 GMT

Contract Last Change Pct Change
SHANGHAI REBAR* 3683 -20.00 -0.54
PLATTS 62 PCT INDEX 117.5 0.00 0.00
THE STEEL INDEX 62 PCT INDEX 117.4 0.40 0.34
METAL BULLETIN INDEX 119.13 0.77 0.65

*In yuan/tonne
#Index in dollars/tonne, show close for the previous trading day
($1 = 6.3685 Chinese yuan)