BEIJING: Iron ore futures retreated on Wednesday, due to some profit-taking and weaker-than-expected inflation data in top consumer China, although the bets of demand picking up along with production resumption among mills curbed losses.
The benchmark October iron ore on the Singapore Exchange was down 0.33% at $107 a metric ton, as of 0913 GMT after hitting the highest level since February 25 at $107.65 on Tuesday.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.25% higher at 805 yuan ($113.03) a ton, after touching the highest since July 25 at 814 yuan in the previous session.
Traders have liquidated some long positions to cash in profits, resulting in a softening in prices, said Steven Yu, a senior analyst at consultancy Mysteel.
“The market direction is currently not clear enough and price movement was mainly driven by expectations, so it’s normal to see some downward correction following a price rally.”
Also, China’s consumer prices in August were down 0.4% from a year earlier, missing the Reuters poll forecast of a 0.2% dip, weighing on sentiment.
Additionally, Brazilian miner Vale said on Tuesday that a fire that hit an auxiliary tower at its maritime terminal Ponta da Madeira was extinguished.
The miner said the fire did not impact its schedule for iron ore shipments nor the volumes of the steelmaking material it expects to ship out.
However, ore demand was expected to improve after Chinese steelmakers resumed production following a military parade in Beijing, limiting price losses.
Coking coal and coke, other steelmaking ingredients, slipped 1.93% and 0.77%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar dipped 0.73%, hot-rolled coil eased 0.39%, wire rod lost 0.3% and stainless steel shed 0.12%.
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