09/06/14 – China iron ore futures resume downturn amid port probe
Chinese iron ore futures slipped for a fifth session in six dragged down by plentiful supply and a crackdown on commodity financing deals in China.
Iron ore for September delivery on the Dalian Commodity Exchange was off 0.6% at CNY 683 per tonne by midday. It climbed more than 1% after hitting a contract low of CNY 675 in the prior session.
Also adding pressure, the most traded October rebar contract on the Shanghai Futures Exchange fell 0.8% to CNY 3,038 per tonne.
China’s Qingdao port said that it is investigating whether warehouse receipts for iron ore were fraudulently used multiple times to raise financing from different banks.
A trader in Singapore estimated said that about 40 million tonnes of iron ore stocked at Chinese ports are linked to financing deals. Iron ore at Chinese ports stood at a record high 113.6 million tonnes last week.