Iron ore slips as EU tariff hike woes outweigh China's fiscal stimulus optimism
BEIJING, Oct 30 (Reuters) -Iron ore futures slid on Wednesday, as concerns over steel demand in top consumer China ignited by the European Union's decision to hike tariff on Chinese electric vehicles outweighed prospects of more fiscal stimulus from Beijing.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 0.7% lower at 777 yuan ($108.88) a metric ton.
The benchmark December iron ore SZZFZ4 on the Singapore Exchange slipped 1.3% to $102.6 a ton, as of 0351 GMT.
The EU has decided to increase tariffs on Chinese-built EVs to as much as 45.3% at the end of its highest-profile trade investigation, raising concerns over exports ahead, which could weigh consumption for steel products domestically.
The resumed confidence on prospects of more fiscal stimulus after a Reuters report pushed prices higher overnight and earlier the session.
China is considering approving next week the issuance of over 10 trillion yuan in extra debt in the next few years to revive its fragile economy, Reuters reported after daytime trading closed on Tuesday.
Other steelmaking ingredients on the DCE lost ground, with coking coal DJMcv1 and coke DCJcv1 down 1.72% and 0.58%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were largely lower. Rebar SRBcv1 shed 0.47%, hot-rolled coil SHHCcv1 lost 0.67%, stainless steel SHSScv1 fell 0.88% while wire rod SWRcv1 gained 0.7%.
"We expect steel output increase will slow down amid narrowing margins and environmental warnings in some northern regions," analysts at Galaxy Futures said in a note.
"But steel fundamentals continued to deteriorate as demand slid with weather getting colder, which will pressure prices."
Faltering steel prices dragged by feeble demand had squeezed margins among steelmakers with China's biggest listed steelmaker, Baoshan Iron & Steel 600019.SS, reporting on Tuesday a nearly 65% plunge in its third-quarter net profit.
($1 = 7.1361 Chinese yuan renminbi)
Reporting by Amy Lv and Colleen Howe; Editing by Rashmi Aich
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