Iron ore falls as demand for steel still soft

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    BEIJING- Benchmark iron ore futures in China fell for a third straight session on Monday, dropping as much as 2 percent in early trade as demand for steel products was still dented by summer heat and floods in southwestern area.

    The most-traded iron ore futures on the Dalian Commodity Exchange, for January delivery fell 1.7 percent to 834 yuan. They had slipped to a low of 831 yuan ($120.14) a ton earlier in the session.

    Spot prices for iron ore with 62 percent iron content for delivery to China, assessed by SteelHome consultancy, stood at $126.5 per ton 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 – 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 utilization rates at blast furnaces in 247 steel mills across China fell to 94.8 percent as of Aug. 21 from 95.2 percent a week earlier, data from Mysteel consultancy showed.