China's iron ore futures edged lower in Thursday's wobbly trade, with market participants reassessing the supply outlook amid indications of a rebound in shipments of the steelmaking raw material from top exporters Australia and Brazil. The most-actively traded September iron ore contract on the Dalian Commodity Exchange (DCE) ended down 0.6% at 889 yuan ($129.20) a tonne, after climbing 1.3% earlier in the session.
"Demand is pretty good, but on the supply side there's a little bit of change in the momentum," said Helen Lau, mining and metals analyst at Argonaut Securities in Hong Kong.
The market seems to have taken a pause, she said, following the sustained rally this year that had pushed the Dalian iron ore to a record high of 924.50 yuan a tonne on Tuesday.
After Tuesday's rally, the DCE announced an increase in transaction fees for Dalian iron ore trades, effective July 18, which may curb trading activity and, thus, volatility in prices, some analysts said.
The fee hike comes after the Chinese government vowed to keep "order" in the market at a meeting last week with top steel mills, domestic trading houses, industrial associations and the DCE, according to a source who attended the meeting.
The Dalian iron ore benchmark has more than doubled this year, amid supply outages from Australia and Brazil, and robust demand in China - the world's top steel producer and consumer.
Iron ore shipments to China from Australia's Port Hedland terminal rose more than 11% in June from a month earlier, port data released on Wednesday showed.
The Baltic Exchange's main sea freight index, which tracks rates for ships ferrying dry bulk commodities, rose on Wednesday, extending gains for a seventh straight session amid strong demand for vessels that ship iron ore from Brazil.
Benchmark spot 62% iron ore for delivery to China steadied at $123 a tonne on Wednesday, near the five-and-a-half-year high of $126.50 hit on July 3, data tracked by SteelHome consultancy showed.
Comments
Comments are closed.