SINGAPORE: Iron ore futures fell on Wednesday, and were on track for a fifth straight session of decline, pressured by slowing demand for the steelmaking material in top consumer China and a firmer dollar. The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) lost 0.86% to 693 yuan ($96.42) a metric ton as of 0242 GMT.
The benchmark July iron ore on the Singapore Exchange shed 0.68% to $92.15 a ton. Steel production is slowing as the off-season sets in, and demand is likely to weaken further, said broker Galaxy Futures. “The rainy season has slowed construction activity in southern China. In the north, high temperatures are contributing to a slowdown,” said ANZ analysts.
Production among China’s blast furnace steel producers slid for the fifth straight week during June 6-12, according to data from consultancy Mysteel, which attributed the fall to regular maintenance stoppages among the mills. “Beijing’s efforts to curb over-capacity in the steel industry looks to be playing out,” added ANZ. China’s crude steel output slid 6.9% from a year earlier to 86.55 million tons in May, data from the National Bureau of Statistics (NBS) showed. Total iron ore stockpiles across ports in China climbed about 1.06% week-on-week to 133.4 million tons as of June 13, Steelhome data showed.
Also pressuring prices was a stronger US dollar, which held onto gains against major currencies on the day amid safe-haven bids, making greenback-denominated assets less affordable to holders of other currencies.
Other steelmaking ingredients on the DCE were mixed, with coking coal down 0.5% and coke up 0.66%. Steel benchmarks on the Shanghai Futures Exchange traded sideways. Rebar fell nearly 0.3%, stainless steel eased 0.04%, while hot-rolled coil traded flat and wire rod added 0.24%.
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