China's iron ore dipped on Thursday and marked its weakest weekly performance in nearly two months, as market expects the supply crunch of the steelmaking raw material to be eased amid increasing shipments from top miners.
The most-traded iron ore futures on the Dalian Commodity Exchange settled 0.8% lower at 712.5 yuan ($103.07) a tonne. It has lost 3.7% this week, recording its biggest weekly loss since mid-April. Chinese market will be closed for the Dragon Boat holiday on Friday.
"The worst period of iron ore supply crunch has passed. All production disruption has been priced in in the market. The new focus in the coming months would switch to demand side," said Wu Jingjing, an executive at China's Iron and Steel Association (CISA), at an industry conference earlier this week. CISA said in an analysis on Wednesday that it expected iron ore supply to increase and prices to face downward pressure. Vessel-tracking and port data compiled by Refinitiv shows that iron ore shipment from Australia rose 12% in May from April to 77.98 million tonnes, while departure from Brazil jumped 65% to 28.36 million tonnes in the period. China's customs will release its May iron ore imports data on June 10.
Brazilian mining giant Vale SA said on Wednesday it had determined that the dam in Minas Gerais, which was under a high risk of collapse, was less likely to slide after safety measures were implemented. That also helps to alleviate market concerns of tighter supply in Brazil. Prices of steel products also sailed into red on Thursday, pressured by mounting concerns over weaker demand following the cut of China's GDP growth forecast from the International Monetary Fund (IMF).
The IMF lowered its 2019 economic growth forecast for China to 6.2% on Wednesday from 6.3% on heightened uncertainty around trade tension. Benchmark Shanghai rebar prices fell 0.2% to 3,737 yuan a tonne, while hot-rolled coil futures edged down 0.1% to 3,597 yuan. Dalian coking coal climbed 0.8% to 1,388.5 yuan a tonne. Coke contract for September delivery clawed back when market closed at 0700 GMT after losing more than 2% in the morning. It was up 1.7% to 2,146.5 yuan.