BEIJING: Singapore iron ore futures edged up on Friday, while the Dalian contract ticked lower, with the market clouded by concerns over decreasing demand caused by lingering production reduction among some loss-suffering Chinese steel mills. Some mills in Northwest, North, and Central China implemented maintenance on blast furnaces as part of efforts to curb losses, according to consultancy Mysteel.
The benchmark June iron ore on the Singapore Exchange was 0.48% higher at $101.7 a tonne, as of 0208 GMT. The most-traded September iron ore on the Dalian Commodity Exchange (DCE) traded 0.21% lower at 719.5 yuan ($104.06) a tonne, as of 0215 GMT.
“Demand has been somewhat suppressed by the (blast furnace) maintenance among some mills; but it’s normal to see (iron ore) price rebound to some degree in the short term amid relativelty low inventories (at mills),” Huatai Futures said in a note, adding that downward pressure will persist in the long run. The other steelmaking ingredients- coking coal and coke slid by 3.75% and 1.37%, respectively.
A few steel mills in China’s top steel production hub-Tangshan kicked off the proposal to lower coke procurement prices by another 100 yuan a tonne on April 27, Mysteel said in a report, adding, this marked the fifth round of coke price drop within April.
“This is not the end yet, and we expect to see a few more rounds of (coke) price falls ahead,” a Shanghai-based steelmaking raw materials analyst said. Rebar on the Shanghai Futures Exchange fell 0.78% to 3,699 yuan a tonne, hot-rolled coil dipped 0.53%, wire rod dropped 0.45% while stainless steel gained 0.76%. China’s biggest listed steelmaker, Baoshan Iron & Steel Co, on Thursday reported a 50.6% fall in first-quarter net profit due to high raw material prices and weaker demand. The markets in China will be closed over May 1-3 for a public holiday.
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