MANILA: Iron ore futures in Asia inched higher on Tuesday after four consecutive sessions of losses, but moved within tight ranges as China’s warning against hoarding and speculation kept market participants cautious.
The most-traded iron ore for September delivery on China’s Dalian Commodity Exchange ended the morning session 0.8percent higher at 1,066.50 yuan ($166.36) a tonne.
The most-liquid June contract for the steelmaking ingredient on the Singapore Exchange was up 0.8percent at $183.95 a tonne by 0338 GMT.
Dalian iron ore dropped to its weakest in nearly six weeks on Monday, while the most active SGX contract hit a four-week low, after Chinese government watchdogs warned industrial metals companies to maintain “normal market order”.
Chinese market regulators have also enforced more stringent trading limits for iron ore and steel products on the Dalian and Shanghai commodity exchanges.
“Increased commodity futures market oversight by Chinese government agencies should keep a lid on further speculative rallies for the time being,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.
On Tuesday, China’s state planner said it would strengthen price controls of key commodities in its 14th five-year plan from 2021 to 2025, making plans to cope with abnormal fluctuations in the prices of items such as iron ore, copper and corn.
Spot iron ore prices in top steel producer China have also dropped, with the benchmark 62 percent grade trading at $192.50 a tonne on Monday, down 17percent from last week’s record $232.50, based on SteelHome consultancy data.
Construction steel rebar on the Shanghai Futures Exchange was up 0.2percent, while hot-rolled coil slipped 0.2percent.