Dalian iron ore little changed, faces steel production curbs in China hub
- The benchmark May iron ore on the Singapore Exchange was 0.87% lower at $105.4 a ton
SINGAPORE: Dalian iron ore futures were little changed on Friday, as investors weighed potential supply disruptions in Australia against tempered demand stemming from China’s environmental curbs in a key steelmaking province.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.06% higher at 776 yuan ($113.71) a metric ton, as of 0342 GMT.
The contract has gained almost 3% so far this week after logging two consecutive weekly losses.
The benchmark May iron ore on the Singapore Exchange was 0.87% lower at $105.4 a ton.
The contract has risen 1.86% this week so far.
Portside iron ore inventories declined this week, with the drawdown on previously-banned BHP product Jimblebar Fines, Shanghai Metals Market said in a note.
Hot metal production has also been sustained at high levels, supporting demand.
In addition, a fire at one of Australia’s two oil refineries has stoked concerns of diesel shortages, which could affect mining operations in China’s biggest iron ore supplier.
Concerns over a short-term supply contraction in the iron ore market have been compounded by persistently high energy prices and fuel shortages linked to the Iran war, Shanghai Metals Market added.
However, several cities in China’s key steelmaking province Hebei have activated emergency responses to air pollution, stoking fears over demand for iron ore as steelmakers restrict production.
Authorities in cities such as Tangshan, Xingtai and Langfang have announced level 2 emergency responses over Wechat on April 16-17. In company news, Brazilian miner Vale reported on Thursday its highest iron ore sales for a first quarter since 2018.
The company’s iron ore sales, which include fines, pellets and run-of-mine, rose 3.9% to 68.7 million metric tons for the January-March quarter from a year earlier.
Other steelmaking ingredients on the DCE fell, with coking coal and coke down 0.51% and 0.62%, respectively. Steel benchmarks on the Shanghai Futures Exchange gained.
Rebar lifted 0.45%, hot-rolled coil advanced 0.24%, wire rod was little changed, and stainless steel jumped 2.34%.
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