SHANGHAI, July 25 (Reuters) - Spot iron ore prices extended their losing streak to touch an eight-month low on Wednesday, as free-falling prices and a gloomy demand outlook kept Chinese buyers at bay.
Iron ore prices, down by more than a third since a record peak in mid-February, have fallen nearly 10 percent in the last two weeks, denting the profits of top iron ore producers such as Rio Tinto and Vale SA.
Benchmark iron ore with 62 percent iron content .IO62-CNI=SI fell for the 10th straight session to $122.90 on Tuesday, the lowest since Nov. 3, 2011.
The most-active rebar contract for January delivery on the Shanghai Futures Exchange dipped 0.08 percent to 3,706 yuan ($580) per tonne, within sight of the record low of 3,652 yuan struck on Monday.
Although data out of China this week suggests an economic recovery in the world's No. 1 steel maker may be imminent, market participants are doubtful that an uptick in its construction sector will be strong enough to soak up the mountains of steel and iron ore that have piled up at ports and steel makers' yards, especially since Beijing has vowed to continue its crackdown on the property sector.
China's cabinet said on Tuesday that it would send out eight inspection teams in late July to ensure local governments implement its property tightening measures to curb speculation, dashing any hopes that it may relax property restrictions to bolster flagging economic growth.
Echoing the industry's bearish views, the world's fourth-largest steelmaker POSCO said it expects the Chinese steel market to bottom out in the third quarter due to Beijing's stimulus measures, but it expects the rebound to be weak.
With around 100 million tonnes of iron ore already piled up in Chinese inventories, traders said prices could fall further amid a supply glut.
"I think the reality is that China can't be expected to keep growing at 200 kilometres per hour and carry the global economy," said Jonathan Claesen, a trader with Metalmin which is a major supplier of minerals to China.
Shanghai rebar futures and iron ore indexes:
Shanghai rebar futures and iron ore indexes at 0620 GMT
Contract Last Change Pct Change
SHANGHAI REBAR* 3710 10.00 0.03
PLATTS 62 PCT INDEX 121.5 -1.75 -1.42
THE STEEL INDEX 62 PCT INDEX 122.9 -0.70 -1.83
METAL BULLETIN INDEX 122.24 -1.47 -1.19
#Index in dollars/tonne, show close for the previous trading day
($1 = 6.3858 Chinese yuan)