BEIJING: Iron ore futures prices extended losses on Wednesday to their lowest levels in more than one week, pressured by persistent concerns about demand in top consumer China amid a lack of significant policy measures to boost steel uptake.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 3.53% lower at 805.5 yuan ($111.43) a metric ton, the lowest since Mar. 19.
The benchmark April iron ore on the Singapore Exchange was 2.1% lower at $101.95 a ton, as of 0754 GMT, the lowest since Mar. 18. “A weak steel price and thin steel margins, coupled with high ore shipments, have suppressed ore demand and prices,” Cheng Peng, a Beijing-based analyst at Sinosteel Futures, said.
Average daily hot metal output in April is expected at between 2.25 million and 2.26 million tons, much lower than the 2.45 million tons in the same period a year before, analysts at consultancy Mysteel said in a research note on Tuesday.
Pressure on ore prices from the supply side persisted in the short term as both overseas ore shipments and domestic ore arrivals rebounded this week, analysts at Huatai Futures said in a note. “Also, there is an expectation of more shipments from Australia and Brazil with the approaching of the end of this quarter,” they said. The persistent weakness came despite better-than-expected industrial data.
Profits at China’s industrial firms jumped 10.2% in the first two months from the same period last year, following a 2.3% profit decline for the whole of 2023, official data showed on Wednesday. Other steelmaking ingredients on the DCE also retreated further, with coking coal and coke down 4.24% and 3.36%, respectively.
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