China's iron ore futures fall on steel demand

Benchmark iron ore futures in China fell for a third straight session on Monday, dropping as much as 2% as demand for steel products remained dented by summer heat and floods in southwestern area.

The most-traded iron ore futures on the Dalian Commodity Exchange, for January delivery closed down 1.8% to 833 yuan ($120.44) per tonne, after slipping to a low of 831 yuan earlier in the session. Spot prices for iron ore with 62% iron content for delivery to China, assessed by SteelHome consultancy, stood at $126.5 per tonne on Friday, unchanged from the previous trading day.

The drop in iron ore futures prices came as consumption for steel products, mainly construction used rebar, was still lean on off-peak season impact.

"The temperature continues to be high nationwide, while north and southwest areas have intense rain drops demand for construction-used materials is recovering slowly," CITIC Futures wrote in a note.

Weekly capacity utilisation rates at blast furnaces in 247 steel mills across China fell to 94.8% as of Aug. 21 from 95.2% a week earlier, data from Mysteel consultancy showed.

Steel rebar futures on the Shanghai Futures Exchange, for October delivery, inched up 0.03% to 3,781 yuan a tonne.