SINGAPORE: Dalian iron ore futures prices extended their decline for a fourth straight session on Wednesday, weighed down by a weakening steel market and lingering concerns of softer demand in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended the morning trade 1.46% lower at 777 yuan ($106.80) a metric ton.
The contract hit an intraday low of 771.5 yuan a ton earlier in the session, its lowest level since April 8. The benchmark August iron ore on the Singapore Exchange, however, was 0.26% higher at $100.85 a ton, as of 0330 GMT.
Steel benchmarks on the Shanghai Futures Exchange mostly posted losses. Rebar and hot-rolled coil fell about 0.9%, wire rod ticked down 0.65%, while stainless steel rose 0.64%.
Falling iron ore prices are a recurring symptom of sluggish steel demand in the domestic market, said Chinese consultancy Mysteel. Chinese steel production reported a 1.1% year-on-year fall to 530.6 million tons in the first half of 2024, World Steel Association data showed.
Disappointment over China’s third plenum remains a headwind for metals, said Westpac analysts in a note. The lack of further support measures for China’s property sector triggered further selling, while easing supply side issues also weighed on the sector, ANZ analysts said.
Global iron ore miners, primarily in Australia and Brazil, ramped up their shipments in June to deliver better quarterly performance reviews, Mysteel added.
However, an unexpected fall in inventories last week contained losses in iron ore prices, the ANZ analysts added. Total iron ore stockpiles across ports in China fell 0.4% week-on-week to 149.6 million tons as of July 19, Steelhome data showed.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 0.5% and 0.85%, respectively. China’s top economic planner said on Tuesday it will support high-quality companies to borrow medium- and long-term foreign debt, to support the development of the real economy.
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