SINGAPORE: Dalian iron ore futures prices fell on Thursday, pressured by increasing supply from top miner Vale and higher steel inventories at Chinese mills.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.61% lower at 810.5 yuan ($113.34) a metric ton, as of 0341 GMT. The benchmark August iron ore on the Singapore Exchange was 0.39% higher at $104.85 a ton. Signs of stronger supply weakened iron ore prices on the Dalian exchange, ANZ analysts said in a note. Top Brazilian miner Vale reported higher second-quarter production, up 3.7% year-on-year, driven by record production at a key mine.
The daily output of steel from key enterprises also increased by 2.1% month-on-month, while inventories climbed 3.9%, data from the China Iron and Steel Association showed. Adding to this, China’s steel billet exports hit a record high from January to May at 4.72 million tons, nearly matching the full-year 2024 total, according to data from Chinese consultancy Mysteel.
Still, sentiment has been broadly positive this week following the announcement that China will be proceeding with the construction of the world’s largest hydropower dam, which has supported steel prices. The downturn in the real estate sector has not reversed, while the market is in a seasonal lull, brokerage Heuxn Futures said, but added that recent stimulus measures could keep steel prices firm in the short term.
Other steelmaking ingredients on the DCE rose on Thursday, with coking coal and coke up 6.58% and 0.32%, respectively. China’s move to curb coal overproduction in key producing hubs continue to fuel expectations of a deeper demand-supply imbalance, supporting market optimism, said Mysteel Global.
Steel benchmarks on the Shanghai Futures Exchange all fell. Rebar and stainless steel dipped around 0.25%, hot-rolled coil eased 0.03%, and wire rod lost 2.41%.
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