Dalian iron ore extends fall on lingering concerns over China demand

BEIJING: Dalian iron ore futures prices fell for a second straight day on Tuesday, weighed down by lingering concerns over demand for the key steelmaking ingredient in top consumer China.

The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) slid 0.44% to 788.5 yuan ($113.34) a metric ton by 0223 GMT.

The benchmark January iron ore on the Singapore Exchange was little changed at $103.6 a ton, as of 0213 GMT.

More steel mills have started equipment maintenance in the run-up to the Lunar New Year holiday in February, dampening appetite for feedstocks including iron ore, analysts at broker Zhengxin Futures said in a note.

Steelmakers in China typically conduct furnace maintenance during winter when demand weakens in the northern region as low temperature hinders outdoor construction activity.

Moreover, expectation of weak steel exports this year undermined buying interest for iron ore amid forecasts of a supply glut, analysts at broker First Futures said in a note.

China’s steel exports hit a record high last year, but growing protectionism backlash against cheap Chinese steel, coupled with Beijing’s introduction of a licence regime, cast shadow on prospects of demand outside China this year, said analysts.

Coking coal and coke, other steelmaking ingredients, slipped 2.52% and 2.39%, respectively, similarly weighed down by fears of diminishing demand.

Steel benchmarks on the Shanghai Futures Exchange lost ground.

Rebar dipped 0.57%, hot-rolled coil shed 0.54%, wire rod ticked down 0.17% and stainless steel fell 1.46%.