FUTURES for Chinese ferrous raw materials tumbled yesterday, undermined by big drop in steel production and expectations of more output cuts in coming months, while steel prices were also hurt by stagnant downstream consumption.

Crude steel output in the world’s top producer of the metal fell for the fifth straight month to 71.58 million tons in October, and logged the first decline of year-to-date production in at least five years amid the government’s curbs, according to the statistics bureau.

China’s steel hub Hebei will cut production at mills by 30 percent for four months starting today to cut air pollutant emissions, said domestic media, following the environment ministry’s requirement on steel winter output cuts.

The outlook of fewer steel production has clouded demand for steelmaking ingredients.

Benchmark iron ore futures on the Dalian Commodity Exchange, for January delivery, fell 1.7 percent to 544 yuan (US$85.24) per ton.

Coking coal prices dropped 11.5 percent to 1,993 yuan a ton and coke futures on the Dalian bourse slumped 8.5 percent to 2,740 yuan per ton.

Meanwhile, sluggish downstream consumption, especially the property market, has overshadowed steel prices.

China’s property investment grew at slower pace in the January-October period from the first nine months, while new construction starts measured by floor area declined at a faster pace, according to the National Bureau of Statistics.

Construction material steel rebar on the Shanghai Futures Exchange slipped 3.6 percent to 4,178 yuan a ton. (SD-Agencies)