BEIJING: Dalian iron ore futures extended losses on Tuesday amid lingering concerns over further government intervention in the market following the latest warning from China on speculative activity in the market and ongoing production curbs.
The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) was 0.95% lower at 890.5 yuan($129.41) a tonne as of 0203 GMT, following a 2.48% drop the previous day.
“The main factors that weighed on (iron ore) prices are the environmental protection-induced production curbs among steel mills (in northern China) and uncertainties stemming from policy control in response to high prices,” analysts at Huatai Futures said in a note.
Northern China’s Handan and Tangshan cities, two major steel-making hubs, implemented level-2 emergency responses on March 17 and March 20, respectively, following a forecast of heavy air pollution in the coming days.
Other steel-making ingredients, such as coking coal and coke, also posted further losses with the former dipping 0.7% and the latter falling 0.54%. On the Singapore Exchange, the benchmark April iron ore, however, recorded a slight increase of 0.4% to $126 a tonne.
“The fluctuation (in iron ore prices) indicates that the market is seeking a clear direction amid mixed factors at the moment,” said Yu Chen, a Shanghai-based senior iron ore analyst at consultancy Mysteel. Steel prices continued their downtrend but demonstrated some resiliency.
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