MANILA: Iron ore futures slipped on Friday, with the Singapore benchmark price set for a second consecutive weekly fall, as traders re-assessed demand prospects taking into account the outlook for the global economy and China’s recovery.
The most-traded May iron ore on China’s Dalian Commodity Exchange ended morning trade 0.1% lower at 856 yuan ($125.91) a tonne. It was, however, up 1.2% for the week.
On the Singapore Exchange, the steelmaking ingredient’s most-active March contract was down 0.6% at $123.2 a tonne, as of 0344 GMT. It has fallen 1.3% this week.
“The international macro influence has intensified, and the domestic resumption of work (after China’s Lunar New Year holidays) is slow, but on the other hand, there is still confidence in the recovery of the domestic economy,” Sinosteel Futures analysts said in a note.
On Friday, Asia-Pacific stocks headed toward a weekly loss as investors fretted about the potential for further interest rate hikes. Improving steel profit margins in China, the world’s biggest producer of the construction and manufacturing material, added support to iron ore prices this week.
“The profitability of steel mills has risen from a low level for five consecutive weeks, and the output of molten iron has risen simultaneously,” Sinosteel analysts said.
Rising iron ore stockpiles at Chinese ports, however, could limit any further price gains. At current levels, analysts said prices already reflect strong demand prospects due to China’s reopening and supportive measures for ailing property developers. China’s portside iron ore inventory had climbed to 136.5 million tonnes last week, the biggest since December, SteelHome consultancy data showed.
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