BEIJING: Dalian and Singapore iron ore futures slightly rebounded on Thursday as the market expected downstream steel demand to gradually recover after the latest wave of inclement weather that has constrained construction activities.
The most-traded September iron ore futures contract on the Dalian Commodity Exchange (DCE) traded 0.25% higher at 803 yuan a tonne, as of 0215 GMT, following a fall of 2.7% in the first two working days of the week after sentiment was undermined by the fresh intervention from the state planner. China’s National Development and Reform Commission (NDRC) said on Tuesday that it would step up supervision of iron ore markets and urged futures companies not to deliberately exaggerate price increases.
Chinese market was closed on Wednesday for a public holiday. Similarly, on the Singapore Exchange, the benchmark May iron ore was 0.42% higher at $118.35 a tonne, as of 0217 GMT, following a drop of 6% so far this week.
“It’s normal to see (iron ore) prices correct upward after dramatic falls, and we prefer to take a watchful stance until a clear direction shows up later,” a Rizhao-based iron ore analyst said.
Other steelmaking raw materials, including coking coal and coke were mixed. Coking coal climbed 0.34% and coke slid 0.62%.
Prices of steel futures were still on the downward trajectory but with a much slower falling pace. Rebar on the Shanghai Futures Exchange fell by 0.27% to 4,021 yuan a tonne, hot-rolled coil shed 0.6%, and stainless steel lost 0.82%. “The (steel) demand has recently been relatively weak while production hovered at a high level, putting prices under downward pressure,” analysts at Everbright Futures said in a morning note. Wire rod gained 0.11%.
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