Iron ore futures fell for a third straight session on Friday and on track for a weekly decline, pressured by an inventory accumulation at Chinese ports and steel mills’ cautious demand.
The most-traded September iron ore on China’s Dalian Commodity Exchange (DCE) traded 0.5% lower at 896 yuan ($124.02) per metric ton as of 0158 GMT. The contract was down 1.5% on a weekly basis.
Seasonal constraints in major iron ore suppliers have eased, with Australia maintenance season largely completed, said Huatai Futures analysts in a report, adding that the China’s iron ore port inventory accumulation level has topped previous years.
“On the demand side, end-user consumption is gradually recovering, and steel mills are gradually resuming production, but the start-up is limited,” Huatai analysts said.
“Affected by the recent shock and decline of iron ore futures, steel mills have low acceptance of high-priced resources and maintain rigid demand purchases, which has limited support for raw material prices,” they added.
DCE iron ore dropped 20% in the first quarter of this year, the biggest decline since the third quarter of 2021. However, cushioning iron prices and the ferrous complex were support measures by authorities in the Chinese property market.
Chinese provincial capitals Hangzhou and Xian on Thursday lifted all home purchase restrictions to lure buyers and shore up their sagging real estate markets, raising the prospect of other megacities following suit.
Iron ore retreats on weak Chinese industrial data
The benchmark June iron ore contract on the Singapore Exchange rose 0.3% to $116.15 a ton as of 0148 GMT.
Other steel-making ingredients on the DCE fell, with coking coal down 1.5% at 1,746.50 yuan a ton, and coke falling 1.7% to 2,265 yuan.
Steel benchmarks on the Shanghai Futures Exchange (SHFE) were mixed.
SHFE rebar slid 0.8% to 3,644 yuan a ton, hot-rolled coil dropped 0.4% to 3,793 yuan, while wire rod increased 0.2% to 3,891 yuan, and stainless steel gained 0.1% to 14,180 yuan.
Comments
Comments are closed.