MANILA, March 9 (Reuters) – Chinese steel futures slumped to their weakest since November on Friday after steel and metals associations in China called on Beijing to retaliate against the United States for slapping hefty tariffs on steel and aluminium imports. Steelmaking ingredients – iron ore and coke – were also sold off, each dropping about 5 percent. While steel shipments from China account for a small portion of U.S. steel imports, any retaliatory action from China and other countries would not bode well for the global economy, analysts say. The Chinese steel and metals industry groups appealed to their government “to take resolute measures against imports of some U.S. products” after U.S. President Donald Trump set a 25 percent tariff on steel and 10 percent on aluminium to counter cheap imports, especially from China. “This tit-for-tat situation is not good for the global economy. Across the board, these trade barriers will affect global economic growth,” said Helen Lau, analyst at Argonaut Securities. The most-active rebar on the Shanghai Futures Exchange fell as much as 4.9 percent to 3,663 yuan ($578) a tonne, its weakest since Nov. 20. It closed down 3.7 percent at 3,709 yuan. Trump’s move risks setting off a global trade war that could see other countries responding with similar trade barriers on products that may hit the U.S. economy, analysts say. “What worries the whole market and investors is what if this is just a beginning? Other countries can implement counter-policies that can make things worse,” said CLSA analyst Daniel Meng. Apart from trade tensions with the United States, Argonaut’s Lau said there are worries over Chinese steel demand. “People are also jittery about demand after March,” said Lau. “Inventory has built up quite fast and after March a lot of construction activity will resume, so if demand is slower than expectations, there will be further pressure on prices.” Inventories of construction steel product reached 7.13 million tonnes on Feb. 23, the most since March last year, data compiled by SteelHome consultancy showed. A separate inventory by Mysteel consultancy showed steel stocks at Chinese traders topping 10 million tonnes on March 1. Along with steel, the most-traded May iron ore on the Dalian Commodity Exchange lost 5.2 percent to end at 483.50 yuan a tonne, after hitting 481 yuan, it lowest since Nov. 20. Amid slow demand, stocks of iron ore at China’s major ports reached a record high 159.1 million tonnes on March 2, SteelHome data showed. Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB slid 3.4 percent to $73.23 a tonne on Thursday, its weakest since Feb. 1, according to Metal Bulletin. Coking coal futures dropped 3.1 percent and coke fell 4.7 percent.

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