MANILA: Iron ore futures hit a four-week low on Monday, as China's portside inventory piled up to its highest since February and worries about future demand for the raw material in the world's top steel producer weighed on sentiment.
The most-traded iron ore contract with January 2021 expiry on China's Dalian Commodity Exchange closed down 3.3% at 760.50 yuan ($113.72) a tonne. It dropped as much as 3.8% earlier in the session to its lowest level since September 25.
The steelmaking ingredient's front-month November on the Singapore Exchange plunged as much as 1.3% to $111.60 a tonne, its weakest level since September 29.
Imported iron ore stocked at China's major ports rose for a fifth straight week to 127.8 million tonnes as of Oct. 23, based on data from SteelHome consultancy.
Rising port inventory and signs of weaker demand in China also weighed on iron ore spot prices, with the benchmark 62% grade trading at $117.50 a tonne on Friday, the lowest since Aug. 5, based on SteelHome data.
"The strong growth in steel production in recent months has also raised concerns of a short-term pullback in output from steel mills as margins come under pressure," said Daniel Hynes, a senior commodity strategist at ANZ.
China's 2020 crude steel output is expected to rise 3%-5% over last year to more than 1 billion tonnes, according to China Iron and Steel Association.
Global steel output edged up 2.9% year-on-year to 156.4 million tonnes in September, its second consecutive month of gains as China continued to ramp up production, the World Steel Association said.-Reuters
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