SINGAPORE/BEIJING: Iron ore futures prices slipped on Thursday, undermined by fears of falling demand in top consumer China in the remainder of the year after Beijing reiterated its stance on continuing to control crude steel output in 2024.
The most-traded September iron ore on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.92% lower at 869 yuan ($119.87) per metric ton, the lowest since May 16.
The benchmark July iron ore on the Singapore Exchange was 2.51% lower at $115.95 a ton as of 0330 GMT. China aims to reduce carbon dioxide emissions of key industries by an amount equivalent to about 1% of the 2023 national total and vows to strengthen control over steel output and capacity, according to a government plan released on Wednesday, adding that Beijing will continue to restrict crude steel output in 2024.
In April, China’s state planner said the government will continue to manage crude steel output in 2024. Beijing started to cap steel output from 2021 to limit carbon emissions.
“It remains unclear whether steel output this year will be flat on year or be lowered; such details are worth monitoring further,” analysts at Sinosteel Futures said in a note.
Other steelmaking ingredients on the DCE were mixed, with coking coal down 0.38% at 1,707.5 yuan ($235.53) a ton and coke rising 0.15% to 2,344 yuan ($323.33).
Steel benchmarks on the Shanghai Futures Exchange (SHFE) were mixed. Rebar strengthened 0.13% to 3,745 yuan ($516.58) a ton, hot-rolled coil was flat at 3,867 yuan ($533.41), wire rod increased 0.25% to 3,982 yuan ($549.27) and stainless steel lost 0.1% to 14,670 yuan ($2,023.56).
“There are expectations that steel fundamentals will improve following the release of government plan on Wednesday, lifting steel prices,” analysts at Hongyuan Futures said in a note.
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