SINGAPORE: Iron ore futures fell for the second session running on Tuesday amid plentiful supply and slow demand ahead of temporary shutdowns or output cuts by Chinese mills as Beijing strives to curb pollution during an APEC meeting in Beijing next month.
Some steel mills in Hebei, China's top steel-producing province, have been asked to reduce or suspend production during the Asia-Pacific Economic Cooperation summit on Nov. 7-12 to help improve air quality in the capital.
"We would expect modest steel production cuts for 2-3 weeks as part of efforts to 'clean Beijing's air' for the APEC meetings," Commonwealth Bank of Australia analyst Lachlan Shaw said in a research note.
"This should reduce iron ore demand in the immediate term and likely mute the expected seasonal restocking into China's winter."
Iron ore for May delivery on the Dalian Commodity Exchange was down nearly 1 percent at 523 yuan ($86) a tonne by midday. The December iron ore contract on the Singapore Exchange dropped 0.3 percent to $78.73 a tonne.
Iron ore for immediate delivery to China <.IO62-CNI=SI> eased 0.3 percent to $79.60 a tonne on Monday, according to data compiled by The Steel Index.
That was not far off the September trough of $77.50, which was the lowest price for iron ore since 2009.
"There's plenty of available supply in the market so nobody's in a hurry to look for a cargo or jump at an offer," said an iron ore trader in Shanghai.
"We are very cautious on taking any long-term contracts right now because the market is very uncertain," said the trader, adding his company had received a couple of offers from suppliers in Australia and Brazil.
Iron ore has fallen 40 percent this year as big, low-cost miners in Australia and Brazil mined record volumes of iron ore to ship more to top market China, where steel demand was growing at a slower rate.
Helping put a floor under iron ore prices was a sustained fall in stocks of imported iron ore at China's ports as mills sought out smaller cargoes, traders said.
Stockpiles of iron ore at China's major ports dropped by 850,000 tonnes from a week before to 107.05 million tonnes as of Oct. 24 <SH-TOT-IRONINV>, data from industry consultancy SteelHome showed. That was the lowest port inventory level since March.
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