MANILA: Iron ore futures fell on Friday as industry data showed rising portside inventory of the steelmaking ingredient in China, with vessel congestion easing and offloading speeding up after weeks of strict coronavirus safety protocols and bad weather.
A strong demand outlook for iron ore and steel products, however, limited losses.
Iron ore's most-active January 2021 contract on the Dalian Commodity Exchange closed down 1.5% at 850 yuan ($124.30) a tonne, after a six-session rally. It gained 3.2% this week.
Iron ore on the Singapore Exchange dipped 1% to $123 a tonne in afternoon trade, after a five-session winning streak.
Tracking solid gains in futures markets, spot iron ore jumped to $128 a tonne on Thursday, the highest since January 2014, based on SteelHome consultancy data.
"It is easier to see a pullback in the futures market that is more responsive to market sentiment, but physical price will be more resilient driven more by supply-demand fundamentals," said Richard Lu, senior analysts at CRU in Beijing.
Imported iron ore stocked at 45 Chinese ports grew for the second consecutive week, by 0.6%, to 113.7 million tonnes by Sept. 3, despite increased port discharges, data provider Mysteel consultancy said.
China's steel demand is forecast to rise from September as cooler weather and repairs following recent flooding boost construction activities, while improved global demand may further lift exports, Xinhua News Agency reported citing the China Iron and Steel Association.
"Exports are back in play to be the key driver for Asia's biggest economy," ING economists said in a note, predicting a 16% rise in China's overall exports in August to a record $249 billion, ahead of the data release next week. Construction steel rebar on the Shanghai Futures Exchange dropped 1.1%, while hot-rolled coil lost 0.9%. Stainless steel slid 2.9%.
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